Impact of American Tariffs: Analysis Across Mechanical and Fashion Industries Sector by Sector
The expected impacts of the 15% tariffs on Italy's most affected sectors, particularly the mechanical industry, are significant and could exacerbate economic vulnerabilities in export-dependent regions and industries.
According to recent research, the mechanical sector is one of the most exposed, with exports to the U.S. accounting for a 27% share, valued at 18 billion euros. The tariffs are expected to raise the costs of exports to the U.S. market, leading to substantial revenue losses for export-dependent companies in this sector.
For the mechanical industry, the tariffs could result in:
- Substantial revenue losses: Export-dependent companies in the mechanical sector anticipate sharp hits from the 15% tariff, with projections similar to those in the automotive industry that face tens of millions of euros in lost revenues.
- Reduced competitiveness: The tariff elevates prices for Italian mechanical goods in the U.S., making them less competitive, especially in a context of euro strength. This could squeeze profit margins and potentially force production adjustments.
- Regional economic impacts: Regions heavily reliant on mechanical manufacturing, such as Lombardy, Emilia-Romagna, and Piedmont—Italy’s industrial heartlands—face increased economic strain. This contraction risks worsening economic output in these areas and unemployment in export-oriented manufacturing hubs.
The territorial level analysis shows that all regions, except Sicily and Sardinia, will experience double-digit reductions in exports. Valle d'Aosta is expected to experience a -34% reduction in exports, followed by -19% in Trentino Alto Adige.
The total impact of tariffs could reach up to 22.6 billion euros, with the direct cost for businesses from tariffs estimated to be between 6.7 and 7.5 billion euros.
In addition, the tariffs contribute to inflationary pressures globally, elevating input costs within the mechanical and automotive supply chains and compressing margins further.
In summary, the mechanical industry in Italy is expected to face reduced export volumes, significant revenue losses, and increased economic strain in key manufacturing regions due to the 15% U.S. tariffs, amplifying the country's economic vulnerability and leading to a fragile post-tariff landscape.
The 15% tariffs on Italy's mechanical industry could also affect other export-dependent industries, potentially leading to substantial losses in finance and business sectors.
The increased economic strain in regions like Lombardy, Emilia-Romagna, and Piedmont, which are heavy on manufacturing, might spill over into other businesses, causing disruptions and financial difficulties.
