U.S. Tariffs Stifled Italy's Economic Growth in 2025 at a Rate of 30%
The EY Parthenon Bulletin, a publication by Marco Daviddi, managing partner of EY, has estimated the possible impact of protectionist measures on various sectors of the Italian economy.
According to the EY Parthenon analysis, the new U.S. tariffs increasing to 30% on Italian exports from August 2025 could cause a cumulative contraction of Italy's GDP by about 1.4% between 2025 and 2026, amounting to a total economic loss of approximately €30 billion. This would effectively erase the previously forecasted GDP growth of 0.6% in 2025 and 0.8% in 2026. The most affected sectors are identified as fashion, design, and food industries, which are highly export-oriented and vulnerable to tariff hikes.
The problem for the Italian economy over the next year is particularly for sectors exposed to the United States, such as pharmaceuticals, agro-food, and some mechanical sectors. The consequences and effects of tariffs would fall on all sectors, as they would slow down the propensity to invest by companies and the propensity to consume by private individuals.
However, the medium to long-term resilience of Italian companies is expected to absorb the shock of American tariffs. Italian companies are demonstrating a remarkable ability to adapt in this complex and uncertain scenario, as shown by the significant increase in foreign investments in the first half of 2025. EY has recorded a 17% increase in announced foreign investment operations, with 143 compared to 122 in the same period last year, and an increase in value, from 7.1 billion euros in the first six months of last year to 13.5 billion.
Despite the uncertain scenario, Italian companies have been actively reflecting, showing awareness, and taking action, and have not remained idle waiting for government decisions. If tariffs are confirmed at 20%, as communicated at the beginning of April, the economic impact is estimated at around 20 billion euros, with a contraction of 65% compared to growth expectations (-0.9% cumulative between 2025 and 2026).
EY's analyses suggest that the effects of tariffs will be cross-sectoral, also at a geographical level, affecting all sectors and all EU nations. The analysis does not predict the impact of potential 10% tariffs because, according to EY's forecasts, the amount of tariffs is unlikely to fall below 20%.
In summary, EY quantifies the expected impact as a significant medium-term GDP contraction of around 1.4% with critical adverse effects concentrated on Italy’s export-dependent luxury fashion, design, and food sectors. The manufacturing sector is already relatively weak and further pressured by tariffs and exchange rate fluctuations, while services remain a moderate growth driver in regions like Lombardy.
References: [1] EY Parthenon Bulletin, Second Edition [2] [Various Industry Estimates] [3] [Additional Industry Estimates] [4] [Industry Analysis]
The potential impact of the US tariffs on Italian industries extends beyond the short term, especially for sectors such as sports, as they may be affected by slowdowns in investor confidence and consumption due to increased costs.
In the medium to long term, the estimated economic loss due to tariffs could significantly impact the growth and stability of Italian sports organizations, given their reliance on international trade and partnerships.
