Italian exports to US show weakness despite pharma gains

Italy was the only major economy in the European Union to report growth in exports to the United States last year, a performance that has been celebrated by the government but questioned by economic analysts. While the national statistics bureau ISTAT recorded a 7.2% year-on-year increase in sales to the American market, a closer look at the underlying data suggests this momentum is largely illusory and driven by temporary factors.

Foreign Minister Antonio Tajani defended the nation's trade position in a recent address to parliament.

\"Italian expertise is stronger than tariffs,\"

However, data from ISTAT and the employers' lobby Confindustria indicate that the growth was almost entirely concentrated in the pharmaceutical sector, where companies front-loaded shipments to avoid impending import duty hikes. When the 54.1% surge in pharmaceuticals is removed, Italian exports to the U.S. actually fell by 1.6%. If exceptional orders for ships and other large transport items are also excluded, the decline in export volume widens to 5.7%.

The fragility of the trade relationship is further highlighted by the fact that 16 out of 22 manufacturing sectors saw a decline in U.S. purchases last year. Mauro Gallegati, an economics professor at Marche Polytechnic University, noted that the overall picture is far from positive when the details are examined. The 15% reciprocal tariff agreement between the U.S. and the EU, which took effect in August last year, is expected to exert more pressure on exporters in the coming months.

Italy remains heavily exposed to markets outside the European Union, with 48.2% of its exports heading outside the bloc. The U.S. market alone accounts for 10.8% of these sales, valued at roughly 70 billion euros. Based on current EUR/USD exchange rates, where one dollar equals 0.8540 euros, Confindustria estimates that annual losses could exceed 16 billion euros if current tariffs remain in place. Confindustria President Emanuele Orsini has also warned that even a 10% tariff could cost the country 118,000 jobs this year.

The pharmaceutical sector, the primary driver of recent export growth, is particularly vulnerable because it is largely owned by foreign firms that outsource manufacturing to Italy to take advantage of lower wage costs. Marco Leonardi, an economics professor at Milan’s Statale University, suggested that future sector-specific tariffs could provide an incentive for these companies to reshore production.

In response to these challenges, business leaders are being urged to diversify their target markets. Barbara Cimmino, vice president of Confindustria, highlighted opportunities in South America and emerging economies such as Mexico, Indonesia, and India. However, diversification is not a complete solution. Massimo Podda, sales director at the Cantina Santadi winemaking cooperative in Sardinia, noted that companies displaced from the U.S. market are becoming more aggressive in other regions, increasing competition globally.

For many entrepreneurs, the U.S. remains an irreplaceable market. Riccardo Cavanna, whose family-run packaging machinery business in the northern Piedmont region sends up to 15% of its exports to U.S. customers, emphasized that personal engagement is now essential.

\"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,\"

Despite the specific challenges in the U.S.,