The sounding of a €22.6 billion alarm by Italian business groups has exposed a fundamental flaw in the new US-EU trade agreement: its one-size-fits-all approach is devastating for nations with diverse export economies. While the deal is tailored to solve Germany’s car problem, it creates a massive new problem for Italy.
The dire forecast from the Italian Employers’ Study Centre is not just about the 15% US tariff. It’s the combined impact of that tariff with a weakening dollar that threatens to wipe out a huge chunk of Italy’s exports to the US. This scenario was seemingly overlooked in the rush to secure a deal for the automotive sector.
Unlike Germany, whose exports to the US are dominated by vehicles, Italy’s trade is a rich mix of machinery, fashion, food, and pharmaceuticals. A blanket 15% tariff hits this diverse portfolio hard, leading to accusations from leaders like Dario Costantini that the tax is “unfair and disproportionate” and specifically penalizes “Made in Italy” products.
Italy’s economic pain highlights the internal EU tensions the deal has created. As the bloc’s third-largest exporter to the US, Italy’s significant losses cannot be easily dismissed. The country’s strong opposition serves as a powerful critique of a deal that appears to have been negotiated for the benefit of one member state’s primary industry, without fully accounting for the collateral damage to others.
