What are the scenarios that theexport to the US after the recent elections in the US? Italian companies are having to deal with the new trade policies announced by the US administration, which predict a significant increase in the import duties. Tariffs could go up to 60% for goods from China and even 100% for Chinese cars, while for other countries an increase of 10% is expected.
These measures have raised concerns among analysts, who are assessing the impact of these policies on US inflation and economic growth, as well as the effects on global trade balances. Against this backdrop of uncertainty, it is natural that the Italian companies will question on the possible consequences and opportunities that could result from the new political situation in the US. While some fear a slowdown in exports, others see opportunities to diversify markets and strengthen trade relations with other countries. It is therefore crucial to analyse not only the challenges, but also the potential positive repercussions that could emerge in this new scenario.
International trade plays a key role in the Italian economy. Italy ranks among the fourth place in the world in terms of export volume, together with Japan and South Korea, and 12th in terms of imports globally. Currently, theexport to the US accounts for about 40% of national GDP, confirming itself as a key driver of economic growth and balance of payments. In 2024, Italian exports increased by 3.7%with growth forecasts of 4.5% in 2025 and 4.2% on average in the following two years. It is estimated that Italian exports can overcome ii EUR 650 billion in 2024, reaching EUR 679 billion this year. Over the past three years, Italian exports have grown more than other European countries. (Source: Infomercatiesteri)
In particular, the United States represents the second largest market for Made in Italywith an expected export of more than EUR 67 billion in 2024. Export to the United States is therefore crucial for many Italian companies, which have seen a steady increase in their sales in the US market in recent years.
With the election of Donald Trump to the presidency of the United States, the political 'America First' has introduced a more protectionist and nationalist approach, raising concerns for Italian companies active in the US market, especially considering the increase in duties on imported products. But is the situation really so worrying?
During Trump's first term, tariffs were introduced on many Italian products, to which Europe responded with duties on agricultural and other goods. The Biden administration maintained these trade barriers and promoted reshoring, implementing policies to support the production 'made in the USA“.
The new post-election scenario thus heralds a return to the 'America First' approach, characterised by protectionist policies that not only increase tariffs and penalise exports, but also aim to reduce taxes and stimulating domestic production. This direction reassured the stock markets, driving up US stock prices and the value of the dollar, while US government bond rates rose.
Some economists argue that markets had already anticipated a Trump victory, generating a positive reaction in the equity sector and a rise in interest rates. US Treasury yields also rose, reflecting expectations of more expansionary fiscal policies.
According to some experts, growth-oriented policy through tax cuts and increased tariffs could favour US equities at the expense of the bond market in the near future. However, inflation could rise, leading to a possible steepening of the yield curve.
In this context, Europe could suffer significant economic shocks: it is estimated that a 10% duty on US imports could reduce European GDP by 0.2% by 2026.
The European stock market is already underexposed to international investors, thus limiting Europe's attractiveness compared to the US market. The US is one of Italy's most important trading partners, and this situation could actually affect the share of Italian exports to the US market.
One aspect that is often overlooked is the impact of higher US tariffs on international commodity prices. The United States, as a net importer of many commodities, could face a increased internal costswith direct consequences on inflation. If the compensatory measures taken by the government prove ineffective, commodity prices could rise significantly in the US market.
On a global level, however, the imposition of duties would reduce theexport to the USincreasing supply in international markets and leading to a price contraction. The experience of Trump's first term, characterised by tariffs on steel and aluminium, offers valuable insights into the effects of such policies. In 2018, the Trump administration introduced tariffs of 25% on steel and 10% on aluminium, in response to an investigation that pointed to national security risks related to imports.
Data show that, between 2018 and 2019, steel prices in the US increased by 16.2%, while on international markets remained stable. indicating that international supply was able to offset the reduction in exports to the US. A similar effect was observed for aluminium, with an increase in domestic prices in 2018, but global prices fellparticularly in China. In Europe, the impact has been mitigated by protective measures taken by the European Union.
This analysis highlights how duties, while aimed at strengthening domestic industry, can also affect foreign markets, altering the global supply and demand balance. The repercussions of such policies are therefore not limited to the internal market, but extend to an international context, with effects that deserve careful consideration.
According to the Swedish National Board of Trade, L'export to the US could be reduced by 16%, with significant impacts in the mechanical, pharmaceutical and chemical sectors. Prometeia estimates that a 10% increase in tariffs could cost Italy over USD 4 billion, hitting the fashion sector in particular. If tariffs were to be applied across the board, the costs for Italian companies could exceed USD 9 billion.
The new US duties are part of the 'Trump Reciprocal Trade Act'an initiative to rebalance trade between the US and its partners. The introduction of restrictions on European products could trigger a new trade war, with EU protection measures and significant consequences on global supply chains. This exchange of protectionist measures would also inevitably affect the international market, as shown by recent developments in the commodities sector, such as steel and aluminium.
If the protectionist approach were to continue, Italian companies could face duties on top products of the Made in Italysuch as wine, cheese and machinery. Already during Trump's first term, these tariffs had a negative impact on the Italian agri-food sector, reducing exports to the US and creating difficulties for Italian producers interested in exporting food to the US.
The technology and automotive sectors could also be affected, with problems in the supply of essential components and increased production costs.
However, the Italian government's recent rapprochement with the United States could lead to economic benefitssuch as increased US investment in Italy, especially in sectors such as technology and renewable energy. On the other hand, Italy could risk losing influence in Europe, where business interests do not always coincide with those of the US.
An excessively close alignment with Washington could isolate Italy, weakening its ability to negotiate favourable terms within the European Union and with other economic powers such as China and Japan.
In light of the above, it is important to emphasise that the imposition of indiscriminate duties would also damage the US economy. It is unlikely that industrial goods, critical to theexport to the US from our country, precisely because of their relevance in the American market as well.
The restrictive measures seem, in fact, to be mainly aimed at China, despite the fact that Beijing's position as the main backer of US public debt places limits on American aggression.
Trump's second term presents both challenges and opportunities. While US equities and the dollar seem to be the main beneficiaries, the investment incentives could create new opportunities for Italian companies, presenting themselves as a quality alternative to Chinese producers.
In this context, the Italian government will play an essential role in the balancing relations with the US without compromising European integration, defining a clear strategy to support Italian companies to prosper in this new global landscape.
In an ever-changing economic scenario, involving a country that is fundamental for Italian exports, it is crucial that Italian companies focus on internationalization strategies aimed at diversifying their target markets, developing local partnerships and adapting their offerings to the peculiarities of the US market.
To successfully seize all the opportunities this market has to offer, careful and strategic planning is required, with the aim of achieving a sustainable path not only in entering but also in maintaining a competitive position in the market.
Do you want to approach the US market with awareness, building a strategic action plan to maximise the potential for success and avoid costly mistakes? SAVE THE DATE:
Find out how by following the webinar dedicated to this topic, organised in collaboration with Credem Bank12 February 2025.
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