On April 2, 2025, President Donald Trump announced a universal 10% tariff on all imports, plus an extra 10% on EU goods, totaling 20% for Italian exports such as apparel and furniture. On April 9, the administration temporarily paused most reciprocal tariffs for 90 days, creating space for ongoing negotiations and offering short-term relief to European exporters.
Implications for Italian Companies:
1. Increased Costs: Italian exporters of consumer goods like apparel and furniture will encounter a 20% tariff when their products enter the U.S. market. The 90-day pause reduces this to 10% until July 8, 2025. This increase may necessitate price adjustments, potentially making Italian products less competitive than those from countries with lower or no additional tariffs.
2. Market Competitiveness: The higher tariffs could lead U.S. retailers and consumers to seek alternatives from countries not subject to these additional duties, potentially reducing demand for Italian products.
3. Supply Chain Adjustments: Italian companies might need to explore strategies such as shifting production to other countries with more favorable trade terms or absorbing some of the tariff costs to maintain market share in the U.S.
EU’s Response and Potential Retaliation:
On April 9, the EU paused retaliatory tariffs on up to €21 billion of U.S. goods until mid-April to allow further discussion and negotiation. European Commission President Ursula Von der Leyen emphasized that the U.S. tariffs could severely harm the global economy and burden consumers with higher costs for essential goods.
Broader Economic Impact:
Economists warn that these tariffs may contribute to increased inflation in the U.S., as importers will likely pass on the additional costs to consumers. This could lead to higher product prices, including apparel and furniture.
In response to these tariffs, Italian Prime Minister Giorgia Meloni said the measures are “wrong” and could harm the U.S. and its allies. She plans an April 17 visit to negotiate, emphasizing the importance of reaching a deal with the United States to prevent a trade war that would weaken Western economies.
The ongoing trade negotiations will certainly trigger future strategic adjustments to mitigate these tariffs’ impact on European operations and competitiveness in the U.S. market. We will monitor the process and keep you informed to better assist during this change.
