Financial catastrophe: A crushing impact of 2.3 billion dollars on the food and wine sectors
The Italian agro-food sector, a cornerstone of the country's economy, is bracing for significant impacts following the agreement on a 15% tariff rate on various products exported to the United States.
The tariffs, while a compromise from the initially threatened 30%, still pose significant challenges for key exports such as cured meats, wine, olive oil, and other key products.
Cured meats, particularly dry-cured hams—Italy's top export to the US—are expected to face serious setbacks. The tariffs come at a time when the industry is already grappling with challenges like African swine fever affecting exports to Asia. These tariffs risk pushing exports back to the lower levels seen in 2022 and increasing prices for American consumers.
The Italian wine sector, with exports worth over €2.1 billion to the US, anticipates losses estimated at around €317 million due to the 15% tariffs. Iconic products like Brunello di Montalcino could be severely affected. Small and medium wineries are especially vulnerable, and there are strong calls for political support at national and EU levels to compensate for these increased export costs.
Olive oil and table olives are also subject to the 15% tariffs, leading to concerns about sales declines and increased competition from "Italian-sounding" products. This could harm the reputation and market share of genuine Italian agri-food products.
More broadly, Italian agro-food exports to the US, including pasta, oil, and cheese (not covered by “zero for zero” tariff regimes), face possible 10-15% export drops due to tariffs, with the wine sector being among the hardest hit.
Industry leaders and associations advocate for unified and strong political measures at both national and EU levels, including financial compensations possibly funded through community funds to offset the dumping effects and increased distribution costs.
The European response has included negotiations to reduce the original threatened 30% tariffs to a 15% compromise. However, the proposed tariffs are seen as a grave and unjustified measure that penalizes not only European producers but also American economic operators, according to Federvini president Giacomo Ponti.
Italian businesses prefer public intervention from the EU over an "iron fist" approach, as the combined impact of tariffs and the devaluation of the dollar is not sustainable for many sectors. The Italian agro-food sector, the leading manufacturing industry in Italy, had aimed to reach €9 billion from US exports in 2020.
In 2019, Italian food and beverages earned €7.8 billion from exports to the US. The sector is now asking for urgent and structural interventions to strengthen their competitive capacity. Confagricoltura president Massimiliano Giansanti considers 30% tariffs unacceptable and calls for Europe to be united in negotiations to find a solution that doesn't harm the economy or productive systems.
The Italian agro-food sector estimates that Trump's tariffs could cost €2.3 billion. For Uiv president Lamberto Frescobaldi, it's unthinkable to place the volumes of wine elsewhere in the short term.
The US is the third-largest market for Grana Padano, and the imposition of tariffs could harm American economic operators who are an integral part of the supply chain, according to Federvini president Giacomo Ponti.
In light of these challenges, the Italian agro-food sector is calling for streamlined bureaucratic burdens, reduced energy prices, and facilitated access to credit to help mitigate the impacts of the tariffs. The sector is also advocating for political support at both national and EU levels to navigate these difficult times.
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- The policy-and-legislation surrounding the 15% tariff on Italian agro-food products, such as cured meats, wine, and olive oil, poses significant challenges for these industries, with the Italian wine sector anticipating losses of €317 million.
- The finance situation of many Italian businesses in the agro-food sector could become unstable due to the increased costs resulting from the 15% tariff on their exports, leading to calls for financial compensations from both national and EU governments.
- Given the implications of the tariffs on various agro-food products, the general-news surrounding the Italian agro-food sector has been dominantly related to the implications of these new policies and the potential impacts on the economy and politics on both sides of the Atlantic.
