U.S. tariff-related uncertainty to reduce Italy's GDP growth, employment: gov't entities

ROME, April 17 (Xinhua) -- Uncertainty sparked by dramatic changes in the United States' tariff regime will have an oversized impact on the Italian economy, with two reports released Thursday predicting reduced economic growth and the loss of tens of thousands of jobs.

In a hearing on the government's budget plan Thursday, ISTAT, Italy's National Statistics Institute, predicted the current situation would likely reduce the country's economic growth by 0.2 percent this year and 0.3 percent in 2026, significant levels considering ISTAT's economic growth prognostications are for just 0.6 percent and 0.8 percent this year and next, respectively.

Meanwhile, in the remarks at the same hearing, Lilia Cavallari, chair of the Parliamentary Budget Office, or the UPB, said the U.S. tariffs would "impact nearly every sector of the Italian economy," saying that their impacts would reduce employment in Italy by "around 68,000 jobs."

The estimates were released the same day Italian Prime Minister Giorgia Meloni was in Washington to meet with U.S. President Donald Trump, with the tariff policy the main item on the agenda.

Meloni is the first European Union leader to meet with Trump since the U.S. leader unveiled unexpectedly harsh global tariffs on April 2. Trump's initial tariffs on products imported to the United States from the European Union were set to be 20 percent, though that policy was quickly paused for 90 days.

A higher 25-percent levy on steel, aluminum, and automobiles from all countries, including in Europe, remains in place, as well as another 10 percent additional tariffs on imports from most U.S. trade partners.

But the data from ISTAT and the UPB say that the bulk of the impacts on the Italian economy will come from uncertainty surrounding the tariff regime from the world's largest economy, rather than from the tariffs themselves.

In her remarks, Cavallari said that although the impacts will be spread across the wider economy, the sectors hit hardest by job losses will include those that depend heavily on exports, such as the pharmaceutical industry, carmakers, mining, and machinery and machine parts manufacturing.

The UPB also noted that the impacts came on the heels of just 0.7 percent economic growth in Italy last year, the first time the country's economy grew slower than that of the euro currency zone since 2021.

ISTAT said that while it expected significant impacts from the tariff situation, economic forecasts were particularly difficult because of a lack of clarity about the "economic and trade policy responses from governments and central banks." ■