The prospects for Made in Italy are becoming more and more gloomy. If the US were to apply 10% duties, the estimated losses for Italian exports could exceed 3 billion euros. An even more dramatic scenario would be with tariffs at 20%, which would increase the economic damage to 12 billion.
This is the result of analyses by several industry organisations, including OECD, Svimez, Prometeia, Confartigianato and the Swedish National Board of Trade. Two pillars of Made in Italy are more risky: fashion and agri-food, already tried by a difficult 2024.
Italian fashion
After closing 2024 with a sharp decline in turnover of 5.3%, to 95.9 billion euros, the Italian fashion industry looks with a timid optimism to 2025, considered as a year of “holding”, but looking with great concern at the threatening US duties. The idea that the new Trump administration will put new taxes on clothes and shoes made in Italy worries the president of the Italian fashion chamber, Carlo Capasa. “Duties always worry everyone, but we hope they are not applied to fashion” said in the margin of the presentation of the Milan Fashion Week.
Capasa recalled that in the past the duties have not been applied fashion and that from the government has arrived the message that “there are ongoing discussions”. The hope is that the sector, already stricken by a difficult year, does not have to face a new tile. Fashion, Capasa recalled, “is the second largest Italian industry. If Trump penalizes the second largest Italian industry it’s almost a hostile statement. I expect there will be no such hostile attack on our second industry, so I am confident”. If there are duties, “we will figure out how to act accordingly”. And to say that the figures of the last quarter of 2024 allowed us to make some optimistic forecasts.
The fall of 2024 has softened. Sales were down 4.2% compared to the last quarter of 2023, but the contraction was less than in the rest of the year. The core sectors of fashion (clothing, leather, leather goods and footwear) are still suffering. The fate of Made in Italy is increasingly saved by the ‘related’ sectors (beauty, glasses, jewelry and costume jewellery). The only ones able to keep exports in positive territory (+2.6% in the first ten months of 2024) with their export growth of 21.8%, against the great cold of exports of core sectors (-4.2%). The general cooling of turnover, despite the increase in prices, It has frozen companies and work, recalled the president of the Chamber of Fashion. “There have been fewer sales, and therefore in the lower part of the chain there is a crisis for lack of pieces produced”.
Not surprisingly the sector has been asking for months to the government requests measures to help small businesses, spine of Made in Italy. From the deferral of taxes to the Cassa Integrazione. ” To not make any company close and not lose staff”, concluded Capasa, convinced that the crisis is “temporary”. A conviction that the Chamber of Labor studies have put black on white: the stabilization at the end of the year and the best international macroeconomic framework can hope for a return to revenue growth in 2025.
But this optimism is “the factor of great uncertainty in the future of US trade policies introduced by the new US administration”. Because the USA is still the third market for exports of Italian fashion, with a trade exchange from January to October 2024 of 4.5 billion for fashion, 3.1 billion for related sectors.
Italian food
“The new geopolitical framework that is emerging after the first choices of the Trump administration cast shadows on the future of Italian agri-food”. The Confcooperative Studies Center estimates that the introduction of customs duties on made in Italy would result in an immediate increase in the prices of Italian products on the US market, with a probable reduction in exports estimated at between 15-30% for key products such as wine, olive oil, DOP cheeses, fruit and vegetable products, processed products such as tomatoes and pasta.
“This could result in a loss of turnover for the sector of about 1.5-2 billion euros annually, considering that the USA is the third market destination of Italian agri-food exports with a value of about 6 billion euros”, Maurizio Gardini at the Fruitlogistica in Berlin on the sidelines of some meetings taking place on the occasion of the International Year of cooperatives proclaimed by the UN for the second time in history. ” Small and medium-sized agri-food enterprises would be among the most affected, as they have less capacity to absorb rising costs or to diversify rapidly into other markets. It is estimated that around 30% may have to reduce production and employment, with particular impact on food districts specialising in cheeses and wines.
The export – emphasizes the president of Confcooperative – is an important drive of our economy above all in light of the contraction of the internal consumption. Companies have invested in aggregation, export and internationalization to make margin. Export more to better remunerate producers and the territory”. To the damage, moreover, would be added the hoax, “the effect of the duties, in fact, would risk to favor the phenomenon of the Italian sounding – adds Gardini – by American or international companies. With higher prices for original Italian products, American consumers could move towards local alternatives that imitate our products, further damaging the value of Made in Italy and its reputation on the international market”.
The Italian production chain would suffer from a chain reaction: from farmers to processors, logistics and distribution. It is estimated that for every 10% reduction in exports to the USA, around 5,000 jobs could be lost in the entire agri-food chain, with particularly severe effects in regions with a strong export focus such as Emilia-Romagna, Veneto and Piedmont. “That of the duties – concludes Gardini – is a theme that must be addressed at Community level to have a greater negotiating weight. In addition to direct negotiation, the EU should also provide for the activation of economic support for companies affected by the duties, helping to mitigate the economic impact on Italian companies in the agri-food sector”.
The Italian wine
The US duties on Italian wine will cause a loss of sales of 330 million euros in 2025, since it would fall to 250 million if the dollar were to maintain its current strength. This is what emerges from the analysis of the Uiv Observatory, Italian Wine Union, in assuming duties of 20% for all still wines and 10% for sparkling wines; lower tariff for the latter determined by the pressures of the US industry, more reluctant to bear commercial limitations on the type of tip.
An estimated loss of 15% on last year’s result, notes the Observatory, based on the French experience between mid-2020 and first quarter 2021 when, in the face of 25% duties, the market response on volumes traded was directly proportional with a 24% decline. Wine is one of the sectors of made in Italy most exposed to duties in the first market in the world – said President Uiv, Lamberto Frescobaldi – the damage on companies will be inevitable, because if they want to remain competitive they must assume a large part of extraThe burden required because the market cannot bear it. But the damage will be double – he adds – because it will inevitably also suffer the end consumers due to an inflation that will come back to knock with insistence”.
As for 2024, shipments to the USA will be worth more than €1.9 billion, 24% of Italian wine exports worldwide; a share more than double compared to the US weight on total Italian goods destined abroad (11%). The contraction caused by extra-tariffs will bring down in a single year the value below 1.7 billion euro, that is to say below the levels of 2021.
Faced with such a large-scale threat, industry associations are calling for EU action to manage the crisis. ” Tackling the problem at EU level is essential to having a greater negotiating weight,” said Mr Gardini. “In addition to negotiations with the US, the EU should provide financial support for the affected companies, to cushion the impact of duties and protect the competitiveness of Made in Italy”.
The Italian industry is therefore preparing for a crucial challenge. The stakes are not only economic, but also concern the global positioning of Made in Italy and the defense of a heritage that is much more than just a brand: it is a symbol of quality, tradition and culture.
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