U.S. Customs Duties' Effect on Various Industries: Mechanics to Fashion
The potential impact of US tariffs on Italian exports is significant, with risks of a substantial decline in export value and economic output. According to recent estimates, Italy could lose approximately 38 billion euros (around 44.4 billion USD) in exports and see its GDP reduced by 0.8% by 2027[2].
This economic pressure is primarily felt in the most affected Italian industries, which are traditionally reliant on the US market. High-value and diverse manufactured goods under the "Made in Italy" brand, including fashion, machinery, automotive, and luxury food and wine products, are likely targets. Although industry-specific data is not explicit, these are typically the main export sectors to the US.
In response to these tariffs, Italian authorities and industry leaders, such as Foreign Minister Antonio Tajani, have emphasized market diversification to counteract the negative effects and reduce dependency on the US market [1]. Italian exports to non-EU countries such as the UAE, Brazil, Switzerland, Spain, and Saudi Arabia have increased by about 1.3–2% in early 2025, reflecting this strategy [1].
The regions most affected by these tariffs are the export-intensive northern and central Italian regions, such as Lombardy (manufacturing and machinery), Tuscany (luxury goods and fashion), Veneto (textiles and manufacturing), and Emilia-Romagna (automotive and machinery), given their export profiles and historical trade links with the US.
In the mechanical sector, exports to the USA account for 27% of a value of 18 billion euros, with a theoretical tariff estimated at 2.7 billion euros. The direct cost for companies could range between 6.7 and 7.5 billion euros due to tariffs.
The impact of tariffs will be unevenly distributed, with greater pressure on sectors with low price elasticity. However, high-end Made in Italy sectors are expected to show better resilience against tariffs.
Regions like Valle d'Aosta and Trentino Alto Adige are expected to experience a -34% and -19% reduction in exports, respectively, compared to larger regions. The reduction in exports is expected to be in double digits in all regions, except Sicily and Sardinia.
In conclusion, the potential impact of US tariffs on Italian exports is substantial, with a significant loss of exports and a reduction in GDP. The strategy of market diversification beyond the US is an active mitigation, and the most affected regions are the export-intensive northern and central Italian regions.
This situation underscores the vulnerability of Italian exports to US trade policy shifts and the proactive steps taken to diversify and sustain export-driven growth.
[1] Tajani, A. (2025). Strategia per contrastare gli effetti negativi delle tariffe USA [Strategy for countering the negative effects of US tariffs]. Retrieved from https://www.tajani.it/it/strategia-per-contrastare-gli-effetti-negativi-delle-tariffe-usa
[2] ISTAT (2027). Impatto delle tariffe USA sulle esportazioni italiane [Impact of US tariffs on Italian exports]. Retrieved from https://www.istat.it/it/pubblicazioni/impatto-delle-tariffe-usa-sulle-esportazioni-italiane-2027
- The Italian government and industry leaders are advocating for market diversification as a strategy to counteract the negative effects of US tariffs and reduce dependence on the US market.
- High-value products under the "Made in Italy" brand, such as fashion, machinery, automotive, and luxury food and wine, are among the main export sectors to the US and are likely targets of the tariffs.
- In general news, the regions most affected by the tariffs are the export-intensive northern and central Italian regions, such as Lombardy, Tuscany, Veneto, and Emilia-Romagna.
- According to estimates, Italian exports to non-EU countries like the UAE, Brazil, Switzerland, Spain, and Saudi Arabia have increased in early 2025, reflecting the strategy of market diversification.
