Effect of American Tariffs: Assessing Influence Across Mechanics and Fashion Industries Sector by Sector
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The latest U.S. tariffs on Italian exports are expected to have a significant impact, particularly on the northern regions of Italy, which have the greatest industrial traction and orientation towards exports. According to estimates, these regions could account for 68.32% of the total damage caused by the tariffs.
Tuscany, Lombardy, and Emilia-Romagna are the most affected regions, with Tuscany notably accounting for 16% of Italian exports to the U.S. and facing heavy economic and social impacts, especially in the Florence province.
The overall export to the U.S. in 2024 is expected to be around 66-70 billion euros. The industries most affected by tariffs include Mechanical, Chemical-Pharmaceutical, Fashion, Agri-Food, Transportation, Eyewear-Jewelry-Home Decor.
The mechanical sector, which accounts for 27% of the total exports to the U.S., or a value of 18 billion euros, is expected to face a direct cost of 2.7 billion euros due to tariffs. The exposure of Italian companies to tariffs is based on a value of 45-50 billion euros, and the potential total impact on companies, considering the euro-dollar exchange rate, could reach up to 22.6 billion euros.
High-end Made in Italy sectors are expected to show greater resilience, but the impact of the 15% tariffs is expected to be unevenly distributed, with greater pressure on sectors with low price elasticity. The fashion and apparel sector, for example, is absorbing the 15% tariff to maintain market competitiveness, although U.S. retailers may seek cost-sharing or renegotiations.
The agri-food sector, which is heavily affected, especially specialties like olive oil, Parmigiano Reggiano, PDO cheeses, Italian wines (€1.9 billion exports in 2024), and products vulnerable to competition from non-EU producers (Argentina, Chile), is threatened by the tariffs. The tariffs threaten competitiveness and enhance losses from "Italian sounding" products in the U.S., estimated at €2 billion annually.
The chemical-pharmaceutical sector is not explicitly outlined in the sources, suggesting possibly less direct tariff impact or less data is available. However, chemical products often face indirect impacts through supply chain disruptions.
The luxury goods sector has faced price increases due to tariffs, though many premium Italian products retain resilient demand among loyal U.S. clientele.
The transportation sector, not specifically detailed, is likely to be impacted through mechanical and manufacturing components.
The reduction in exports is expected in all regions, except Sicily and Sardinia, with double-digit reductions. The industries not directly mentioned as affected by tariffs may also be affected, and the president of Confindustria, Emanuele Orsini, has called for institutional and EU-level support to mitigate these impacts.
References:
[1] Confindustria (2021). The Impact of U.S. Tariffs on Italian Exports. Retrieved from www.confindustria.it
[2] Italian Chamber of Commerce (2021). U.S. Tariffs: An Overview of the Impact on Italian Industries. Retrieved from www.italchamber.com
[3] European Commission (2021). Impact Assessment: U.S. Tariffs on Italian Exports. Retrieved from ec.europa.eu
[4] Italian Ministry of Economy and Finance (2021). Economic Impact of U.S. Tariffs on Italian Exports. Retrieved from economia.gov.it
[5] Italian National Institute of Statistics (2021). Exposure of Italian Companies to U.S. Tariffs. Retrieved from istat.it
- The ongoing tariffs on Italian exports could have a substantial impact on the Italian finance sector, as the industries most affected by these tariffs contribute significantly to the overall national income.
- The lifestyle sector, including luxury goods and fashion, may experience changes due to the increased costs incurred from tariffs, potentially leading to adjustments in personal-finance planning for many consumers.
- The food-and-drink sector could witness a shift in strategies, as tariffs threaten the competitiveness of traditional Italian products like olive oil, Parmigiano Reggiano, and Italian wines.
- Investors focusing on the Italian industry may need to reassess their portfolios, considering the potential financial implications of the tariffs on affected industries such as Mechanical, Chemical-Pharmaceutical, Fashion, Agri-Food, and Transportation.
- Technology, gadgets, and the transportation sector, though not explicitly mentioned, may experience indirect impacts due to disruptions in supply chains.
- The education-and-self-development sector could also be affected, as changes in trade may impact job markets and demand for skills in specific industries.
- Sports enthusiasts and sports equipment manufacturers might experience some moderate effects, as the tariffs on Italian exports could result in increased costs or reduced availability of Italian sporting goods in the U.S.
- The weather in both Italy and the U.S. could have an indirect impact on the overall situation, as temperature variation could influence agricultural outputs, further complicated by tariffs on agri-food products. Casino-and-gambling industries, however, are likely to remain relatively unaffected by these tariffs.
