More than 6,000 Italian companies, mostly micro and small firms, are directly exposed to the risks of higher U.S. tariffs.

ROME, July 19 (Xinhua) -- As a trade deal between the United States and the European Union (EU) remains unresolved, Italy is grappling with dual challenges: a new round of U.S. tariffs that could directly hit its export-reliant economy and a weakening U.S. dollar that effectively acts as an "implicit" tariff on Italian exports.

U.S. President Donald Trump has announced the decision to impose a 30 percent tariff on imports from the EU and Mexico starting Aug. 1, adding fresh uncertainty for Italian exporters who depend heavily on the American market.

According to Italy's National Institute of Statistics (ISTAT), Italy ranked as the EU's third-largest exporter to the United States in 2024, with shipments to that market accounting for 10 percent of its total exports, a share comparable to Germany and higher than France or Spain.

TARIFF IMPACTS ON ITALY

In 2024, Italy posted a trade surplus of 39 billion euros with the United States. Exports to the United States represent 22.2 percent of Italy's sales to non-EU countries, exceeding the EU average of 19.7 percent. Italy's top export sectors to the United States include beverages, automobiles, and other transport equipment, according to a report by Confindustria, Italy's major association representing manufacturing and service companies.

Currently, Washington levies a 50 percent duty on EU steel and aluminum, and a 25 percent one on cars and auto parts, while most other goods are subject to a baseline 10 percent rate.

The Study of International Politics (ISPI) estimates that if the U.S. enacts a 30 percent tariff, Germany's GDP would decline by 0.5 percent, Italy's by 0.36 percent, and France's by around 0.25 percent, compared to a scenario without such tariffs.

Earlier this week, Italy's Association for the Development of Industry in the Mezzogiorno (SVIMEZ) also released its estimate, projecting a reduction of nearly one-fifth in export volume and a loss of 12.4 billion euros in trade once the tariffs take effect.

"IMPLICIT" TARIFF ON ITALIAN EXPORTS

Beyond U.S. tariff hikes, the current euro-dollar exchange rate poses another hurdle for Italian exporters. Italian Minister of Economy and Finance Giancarlo Giorgetti recently stressed that a weak U.S. dollar effectively acts as an "implicit" tariff, making U.S. goods cheaper and imported goods more expensive, thus distorting international trade flows.

The dollar's devaluation against the euro "is the biggest in the world," and Confindustria's projections indicate that it would increase in the coming months, reaching up to 20 percent.

"Any tariff level on top of that is out of control," since the cheaper dollar represents the "highest tariff that (Europe) already faces... making us lame from the start," Emanuele Orsini, president of Confindustria, said at a conference in Rome. In his view, the only acceptable tariff on EU exports to the United States would be zero, as the bloc is already facing a detrimental exchange rate.

Market data reflect such concerns. The euro was trading at about 1.162 U.S. dollars at the end of Friday, up from approximately 1.03 dollars at the beginning of the year. This "implicit" tariff has already slowed Italy's export momentum. ISTAT data shows that Italy's imports from the United States rose by 18.5 percent in May year-on-year, while exports to the United States increased by just 2.5 percent.

EXPORT RISKS AND RESPONSE

More than 6,000 Italian companies, mostly micro and small firms, are directly exposed to the risks of higher U.S. tariffs, the Italian Trade Agency said in a report released Wednesday.

The report estimated that the export value from these companies to the United States is more than 11 billion euros.

Lucia Aleotti, vice president of Confindustria, described exports as Italy's economic locomotive. With Italy's trade surplus with the United States reaching 39 billion euros last year, any prolonged hit from tariffs or the dollar's devaluation could severely impact the Italian economy, she said.

Aleotti further warned that, over the medium term, the greatest risk lies in companies shifting production to the United States as Europe's appeal to investors continues to erode.

"The repercussions would be nationwide," SVIMEZ President Luca Bianchi told television channel Class CNBC.

Italian Foreign Minister Antonio Tajani said Monday the EU is prepared to impose billions of euros in retaliatory tariffs on U.S. goods should ongoing trade negotiations between the two sides fail to produce a deal.

In an interview published by Italian daily Il Messaggero, Tajani emphasized that while the EU has the tools to defend its economic interests, dialogue remains the preferred path forward. "Tariffs hurt every side, including the U.S.," he said. (1 euro = 1.16 U.S. dollar)