The agreement on the duties between the United States and the European Union, although defined as a “success” by some political and entrepreneurial environments, could have negative consequences for Italian consumers. The new customs rates imposed by the Trump Administration, which also touch Italy, could entail for families an increase in spending prices up to 4.2 billion euros per year.
This is an additional burden, estimated by Codaconswhich would add to the current economic difficulties, such as persistent inflation and the increase in energy costs, and which would further reduce the purchasing power of citizens.
What do Trump’s duties have to do with the increase in prices
To understand the impact of the new duties, their functioning must be clarified. The tariff barriers introduced by Washington will reduce the competitiveness of European exports to the United States, a strategic market for many sectors, from agri -food to automotive.
So it is likely that companies, seeing the margins on foreign markets decrease, will tend to recover the losses by increasing the lists intended for the internal market.
The cost of commercial difficulties will not only fall on companies, but will also be transferred to consumers. This mechanism, already observed in the past in similar situations, risks transforming itself into a multiplier of inflation, going to weigh on the shopping cart and on daily consumer goods.
The most affected sectors: food and automotive
Some sectors, such as that of luxury, will be able to better absorb the impact of duties. In fact, the high -end products have sufficient profit margins to compensate for any increases or sales reductions.
The situation for key sectors of the economy is different. For Italy, exporting wine, oil, pasta, cheeses and salami to the United States represents a fundamental voice of exports.
The duties of 15% will reduce the competitiveness of these products, pushing many companies to pour part of the additional costs on the internal market. The risk is that the Italian consumer ends up paying more even national products.
The European car industry, and in part the Italian one, which has already undergone the competition of more competitive markets for some time, with the imposition of new rates will further reduce export opportunities, with chain consequences on the production, employment and prices of the cars sold in Europe.
The estimated overall effect is an increase in Italian inflation even by 0.5%. An apparently contained variation, but capable of significantly eroding the purchasing power of families, already in difficulty for the increases of recent years.
Duties, inflation and interest rates: an explosive mix
When it comes to duties and inflation, a further risk that the possible domino effect on European monetary policy cannot be underestimated.
If the increase in prices extended to the entire euro area, the European Central Bank would be forced to consider a new rise in interest rates, after a phase of attenuation of restrictive policies.
This scenario would have very heavy consequences for millions of citizens, namely:
- Those who have turned on a variable rate mortgage would see the monthly installments grow further;
- The companies, already tried by the increase in production costs, would find themselves paying higher interests for funding;
- Consumption, the driving force of the Italian economy, would undergo a new braking.
The combination of inflation from duty and possible credit grip therefore risks triggering a vicious circle that could lastly penalize economic growth.
It is not just about macroeconomic dynamics, because the daily life of Italians and all Europeans will be influenced, from the price of bread to that of petrol, up to the mortgage installments.
