US Tariffs of 30% Halted Italy's Economic Growth in 2025
In a recent analysis by EY Parthenon Bulletin, the potential impact of protectionist measures, specifically new U.S. tariffs on Italian exports, is estimated to cause a significant blow to the Italian economy. If confirmed at 30%, these tariffs could lead to a cumulative GDP contraction of around 1.4% for Italy between 2025 and 2026, representing a total economic loss near €30 billion.
The sectors most vulnerable to these tariffs are the fashion, design, and food industries, which contribute significantly to Italian exports to the U.S. These sectors are particularly at risk due to their heavy reliance on the American market and the high tariff impact on luxury and gourmet products.
Italian companies and industry associations have expressed strong warnings and concerns about the damage such tariffs could cause. Italy's largest industrial association has projected that these tariffs might lead to a €38 billion loss in exports by 2027, potentially lowering GDP by 0.8% over the medium term.
The Italian government has also voiced its concern, with Economy Minister Giancarlo Giorgetti publicly warning about the systemic risk these tariffs pose not only to Italy but also to global economic stability. He emphasised the cumulative negative effects alongside dollar depreciation, which further complicates trade competitiveness and inflation.
Despite the looming threats, Italian companies have shown remarkable adaptability. There has been a 17% increase in foreign investments, with the value rising from 7.1 billion euros in the first six months of last year to 13.5 billion euros in the first half of 2025. This resilience may help absorb the impact of US tariffs.
The EY Parthenon Bulletin, a publication discussing various economic issues, has provided an estimate of the impact of protectionist measures on the Italian economy. It suggests that the consequences and effects of tariffs would potentially fall on all sectors, as they could break the propensity to invest by companies and the propensity to consume by private individuals.
Sectors like pharmaceuticals, agri-food, and some mechanical sectors are more exposed to the United States and could be affected by US tariffs. The short-term impact on these sectors could be significant, particularly in the pharmaceutical industry, which is a critical contributor to Italy's economic growth.
In conclusion, the potential confirmation of 30% tariffs could have a profound impact on Italy's economy, particularly on export-dependent sectors. The Italian government, industry associations, and companies are actively addressing these challenges, demonstrating a proactive approach to mitigate the potential long-term economic damage.
The analysis by EY Parthenon Bulletin suggests a cumulative GDP contraction of around 1.4% for Italy between 2025 and 2026, which could amount to approximately €30 billion, impacting sectors like fashion, design, and food industries that rely heavily on the American market. Italian companies, on the other hand, are demonstrating resilience, with a 17% increase in foreign investments in the first half of 2025, potentially helping absorb the impact of US tariffs.
