Italy was the only major EU country whose exports to the US grew last year despite Donald Trump’s tariffs. The result was hailed by Italy’s government, but a closer look at the data shows one-off factors at play and little underlying resilience.
With an increasing share of Italy’s manufacturing exports going to the US in the past 15 years, that is bad news for the euro zone’s third-largest economy, whose already weak growth is now threatened by surging energy costs.
“Italian expertise is stronger than tariffs,” foreign minister Antonio Tajani told parliament last month after national statistics bureau Istat reported a 7.2% year-on-year rise in US sales.
However, detailed numbers from Istat and employers’ lobby Confindustria show almost the entire increase was driven by pharmaceutical shipments front-loaded before the import duty hikes.
Pharma and one-offs distort the picture
Stripping out the 54.1% increase in pharmaceuticals, Italy’s exports to the US fell by 1.6%, Confindustria calculated in a March 26 report.
Also removing exceptional orders for ships and other large transport items, the decline widens to 5.7% — a sign the country’s apparent export momentum to the US may be not only illusory but also nearing a turning point.
“Italy’s trade with the US seems to be in good shape, but when looking at the details, the overall picture is far from positive,” said Mauro Gallegati, professor of economics at Marche Polytechnic University.
Italy is more exposed to non-EU markets than its peers, with 48.2% of its exports headed outside the bloc last year, and the US absorbing 10.8%, or about €70bn (R1.35-trillion).
Moreover, the 15% “reciprocal” tariff agreement agreed by Trump and the EU only came into effect in August last year, meaning its main impact has yet to be felt.
Out of 22 manufacturing sectors measured by Istat, 16 saw a decline in US purchases last year, several posting double-digit falls.
Italy is more exposed to non-EU markets than its peers, with 48.2% of its exports headed outside the bloc last year, and the US absorbing 10.8%, or about €70bn (R1.35-trillion).
The share headed to the US has been increasing steadily for the past 15 years, Istat data shows.
Confindustria said in its report that, assuming the current US tariff structure remains in place, the losses for Italian exports could exceed €16bn (R308.3bn) per year in the medium-term, compared with a tariff-free scenario.
Its report did not estimate the impact on the labour market, but while talks between Trump and the EU were still ongoing in mid-2025, the group’s president Emanuele Orsini warned that even a lower tariff of 10% could cost Italy 118,000 jobs this year.
Underlining Rome’s fragility is the fact that its pharma output, the main export to the US, is largely owned by US and other foreign firms that outsource manufacturing to Italy due to its relatively low wage costs and expertise.
“This makes pharmaceuticals highly vulnerable to future, possibly sector-specific, tariff hikes by Trump, which could act as an incentive for the companies to reshore,” said Marco Leonardi, economics professor at Milan’s Statale University.
Diversify for export resilience
Despite Italy’s sluggish economic growth — consistently less than 1% per year — outside the US, its exports are holding up relatively well, Confindustria and Istat said.
Overall exports to the rest of the world rose 3.3% in 2025 in value terms and 0.7% in volume terms, not affected by price rises.
It’s not really the time for remote working; you need to have your suitcase packed because you have to go out and find clients and projects
— Riccardo Cavanna, Italian entrepreneur
According to Barbara Cimmino, vice-president of Confindustria, in the face of Trump’s import duties Italian companies “should focus on market diversification”, targeting areas such as South America, Mexico, Indonesia and India.
Yet even diversifying does not offer full tariff protection, said Massimo Podda, the sales director at Cantina Santadi, a winemaking co-operative on the Italian island of Sardinia.
“We have always taken care to balance out exposure across various markets,” he said. “But the tariffs have ended up causing problems for us too, because many companies that were heavily reliant on the US market have had to become much more aggressive in markets where they previously had a smaller presence.”
The US remains an irreplaceable market for many Italian entrepreneurs, such as Riccardo Cavanna, whose family-run packaging machinery business in the northern Piedmont region sees up to 15% of its exports go to US customers.
Cavanna said, bearing in mind that “tariffs are the new normal”, he had increased his personal trips to customers to defend his market share.
“It’s not really the time for remote working; you need to have your suitcase packed because you have to go out and find clients and projects,” he said.
Reuters
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