U.S. tariff policies to cause "structural crisis" for manufacturing, says Italian industrial association

ROME, April 18 (Xinhua) -- Italy's leading industrial association Confindustria said Friday that the "wave of uncertainty" generated by the United States' tariff policy will be a significant drag on Italian economic growth.

In a research note, Confindustria said that the tariffs and the confusion surrounding them create a risk of a long-term "structural crisis" for Italian industrial production. The biggest impact will be on Italian manufacturing, the association said.

Even before the U.S. tariff policies were announced earlier this month, the Italian economy was struggling, according to Confindustria. This is due to slowing industrial demand, instability in financial markets, and weaker rates of investment negatively impacting the country's economy.

Although falling energy and transportation costs and lower euro currency zone interest rates are helping to support production, the U.S. tariffs are among the biggest factors crippling growth prospects, Confindustria said.

"The wave of uncertainty generated by the continuous announcements on duties and the duties themselves slow down trade and, with the instability of financial markets, spending and investment decisions," Confindustria explained.

According to Confindustria's research, the United States is the leading non-EU destination for Italian goods, services, and foreign direct investment. Manufacturing accounts for almost all Italian exports to the United States, representing more than one-tenth of total manufacturing sales abroad (10.8 percent). The most exposed sectors are pharmaceuticals, motor vehicles, and machinery.

Confindustria predicts that tariffs and uncertainty are expected to reduce Italian GDP growth by 0.3 percent in 2025-2026, due to a lower growth rate in goods exports and investment in machinery.