"Imposing 30% tariffs on Arredo could potentially wipe out the company's presence in the U.S. market"
The Italian wood-furniture industry, a key export sector, is bracing for a potential severe negative impact due to a proposed 30% tariff on exports to the United States, combined with the depreciation of the dollar. This tariff, which could be implemented as early as August 1, 2025, poses a dramatic blow to business, threatening competitiveness, jobs, and growth in the sector.
The furniture sector, which accounts for about €4.5 billion in exports to the U.S., is expected to experience a significant loss of competitiveness, particularly in mid-range products. A 15% tariff alone was previously estimated to cause a 10-20% drop in exports. The newer proposed tariff, double this amount, intensifies the threat considerably.
Price increases passed to U.S. consumers so far are doubtful to be sustainable due to the magnitude of the tariff. The potential impact on jobs and growth is also a concern, as the industry is tightly connected to design and manufacturing sectors in Italy that heavily rely on the U.S. market.
The depreciation of the U.S. dollar against the euro would make Italian goods more expensive in the U.S. market independently, compounding the tariff's negative impact by reducing demand or forcing further price adjustments by Italian exporters.
Combining a 30% tariff with dollar weakness could lead to a drastic reduction in export volumes and profitability for Italian furniture manufacturers targeting the U.S., harming one of Italy's key export sectors and raising concerns about sustained competitiveness globally.
Claudio Feltrin, president of FederlegnoArredo, an organization representing the Italian furniture industry, has expressed concerns about this potential loss. The impact of these tariffs on the furniture industry in Italy is a significant concern, with predictions of a potential loss of a market worth €1.7 billion.
In the first quarter of 2025, exports to the United States increased by 3% for the entire wood-furniture supply chain. However, overall exports remained stagnant (-0.4% compared to the first quarter of 2024), possibly due to stockpiling in anticipation of tariffs.
The furniture sector in Italy generated €14.4 billion in exports in 2024, with a total of €27.5 billion, making the United States the second-largest export market for Italian furniture. The Italian wood-furniture industry generated €51.7 billion in revenue in 2024.
[1] Source: FederlegnoArredo [2] Source: Assopelletiere
- The potential impact on jobs and growth in the Italian wood-furniture industry, a significant concern with predictions of a potential loss of a market worth €1.7 billion, extends beyond its own business and could have a ripple effect on other related industries, such as finance and design.
- Given the key role of the U.S. market in the Italian furniture industry's exports, with the United States being the second-largest export market for Italian furniture, a 30% tariff could potentially disrupt other industries reliant on its success, such as finance and other export-oriented businesses.
