MILAN — Confindustria, Italy’s main industrial federation, estimated that U.S. President Donald Trump‘s new tariffs could cost the euro zone’s third-largest economy 0.82 percent of its gross domestic product by 2027.
If the 30 percent tariffs are confirmed, Italy’s GDP would be negatively impacted by 0.25 percent this year, by 0.59 percent in 2026 and 0.82 percent in 2027, Confindustria’s research unit said Monday.
On July 12, Trump posted letters on Truth Social detailing the new duty rates for Mexico and the European Union‘s 27-member trade bloc. On Sunday, U.S. Commerce Secretary Howard Lutnick told CBS News he was confident the U.S. and the EU could secure a trade deal before the hard Aug. 1 deadline.
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Confindustria senior economist Ciro Rapacciuolo estimated the negative impact on Italian exports of goods to the U.S. would be 38 billion euros, equal to more than half of the value of Italy’s exports to the U.S.
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“The further announcements on U.S. tariffs have raised uncertainty and eroded confidence: together with the devalued dollar, these are bad news for exports, consumption, investments,” the report said.
Positive news, it said, comes from the partial return of oil prices, contained inflation, and the probability of further interest rate cuts. Inflation remains low in Italy and was up 1.7 percent in June.
Prior to Trump’s letter, Confindustria’s president Emanuele Orsini had already raised alarm over the original 10 percent tariffs and said together with the devaluation of the U.S. dollar, higher tariffs would result in a loss of 20 billion euros in exports and 118,000 jobs by 2026. The dollar hit its lowest point against the euro in four years at the end of June. Confindustria is Italy’s main industrial federation.
EY‘s recent Parthenon Bulletin said Italy‘s gross domestic product could shrink 1.4 percent in 2026 versus 2025 as a result of the tariffs, reducing previous growth forecasts. “Taking these factors into account, it seems unrealistic to foresee a final agreement between the EU and the U.S. that would set tariffs around 10 percent, as indicated in the estimates and expectations of European institutions,” EY Parthenon managing partner Marco Daviddi commented, adding that tariffs will unlikely settle at under 20 percent.
According to economists at Istat, forecasts in June said the Italian economy was actually expected to grow 0.6 percent in 2025 and 0.8 percent in 2026, lifted by improving domestic demand.
Confindustria insisted that amid difficult times, geographical diversification is key. The report said Italian exporters should focus on markets with high growth potential, such as the South American trade bloc, which contributed 7.5 billion euros to Italian exports. The report also mentioned India, Australia and South East Asia. According to Confindustria’s estimates, sales of goods to the rest of the world could increase by about 13 billion euros cumulatively in 2027, offsetting U.S. export losses.
In 2024 the textile and apparel sector exported more than 2.75 billion euros worth of goods to the U.S., according to Confindustria Moda.
FederlegnoArredo, the Italian federation of woodworking and furniture industries, which represents the majority of Europe’s luxury furniture-makers, said the U.S. was Italy’s largest extra EU market and exports to the U.S. were worth 2.8 billion euros in 2024.
FederlegnoArredo’s president Claudio Feltrin said a 30 percent tariff on goods would be a tipping point for the industry and would have a severe impact jobs and growth.
“Faced with the news of Trump’s decision to introduce 30 percent tariffs on EU exports to the U.S., we can only be concerned and alarmed. Europe must avoid a tariff-against-tariff battle that would benefit no one,” Feltrin said, adding that the entire European production system would be severely impacted. “Failing to defend our businesses now could result in the industrial desertification of the Old Continent,” he added.
Feltrin and business owners here are also banking on growth in the Middle East in new frontiers in Saudi Arabia and the United Arab Emirates.