US tariffs of 30% hinder Italy's economic growth in 2025
In a recent edition of the EY Parthenon Bulletin, Marco Daviddi, managing partner of EY, has warned that certain sectors in Italy could face significant challenges in the coming year due to their exposure to the United States. The publication, which is the second edition of a series, discusses the potential impact of protectionist measures on Italy's economy.
The effects of tariffs will be cross-sectional at a geographical level, with a homogeneous impact in all EU nations. However, sectors more exposed to the United States, such as pharmaceuticals, agri-food, and some mechanical sectors, may be particularly affected. The most affected sectors are Italy's key export industries, including fashion, design, and food industries, given their high export orientation toward the U.S. market.
The confirmation of 30% tariffs starting from August 1st could result in a cumulative reduction in Italy's GDP of 1.4%, effectively wiping out the expected growth of 0.6% and causing a negative impact of nearly 30 billion euros between 2025 and 2026.
Preliminary data for the first half of 2025 shows that exports initially surged due to frontloading (early shipping before tariffs) but declined sharply in Q2 after tariffs took effect, causing a quarterly GDP drop of 0.1% and a noticeable drag on net exports estimated at -0.3% in Q2 alone. Companies have warned about the risk of "undermined trade" and weaker growth due to these tariffs.
Despite the complex scenario and great uncertainty, Italian companies are demonstrating a remarkable ability to adapt. The resilience of Italian companies may absorb the shock of American tariffs over the medium to long term.
On a positive note, EY has recorded a significant increase in foreign investments, with a 17% increase in announced operations and an increase in value from 7.1 billion euros in the first six months of last year to 13.5 billion.
In conclusion, protectionist tariffs by the U.S. threaten to substantially reduce Italy's GDP growth by hitting its export-reliant sectors hard. Italian firms face immediate challenges from diminished U.S. demand and trade disruptions, complicating recovery efforts amid ongoing global economic uncertainty.
[1] EY Parthenon Bulletin, Second Edition, 2025 [2] Quarterly National Accounts, Italian National Institute of Statistics, 2025 Q2 [3] Italian Export Trade Federation, Press Release, 2025 Q2 [4] Bank of Italy, Economic Bulletin, 2025 H1
The tariffs imposed by the United States have the potential to negatively impact the finance sector, as it impacts Italy's economy and its key export industries, such as fashion, design, and food industries. The effects could lead to a cumulative reduction in Italy's GDP, threatening the growth of these sectors and causing a substantial financial strain.
The confirmation of increased foreign investments, with a 17% increase in announced operations and a value rise from 7.1 billion euros to 13.5 billion, offers a glimmer of hope for the business community in Italy. This increase may mitigate some of the financial challenges posed by the protectionist measures in the long term.
[1] EY Parthenon Bulletin, Second Edition, 2025 [4] Bank of Italy, Economic Bulletin, 2025 H1
