World Economy

Italy Fears Sting of Trump Trade Barriers

Trump declares war on the Vespa.
Trump declares war on the Vespa.

Italy voiced alarm over President Donald Trump’s plans to target imports responsible for the US trade deficit, amid fears products like Vespa scooters could be hit by punitive duties.

“Trump declares war on the Vespa,” said a headline in national daily Il Messaggero, reflecting the tone of most of the media coverage on an issue that dominated front pages and topped news bulletins, AFP reported.

The alarm followed reports that scooters and motorcycles feature on a ‘blacklist’ of 90 European products earmarked for the imposition of 100% duties as Trump prepares to launch an offensive against “trade cheats”.

The European products are vulnerable to potential measures because of a transatlantic dispute over Europe’s ban on beef produced with the aid of hormones that pre-dates Trump coming to power.

Along with mopeds, the symbolic Italian products that could have punitive duties slapped on them reportedly include tomatoes in every form, salami and Parma ham, and San Pellegrino mineral water, now owned by Switzerland’s Nestle.

Italian Prime Minister Paolo Gentiloni Friday voiced concern over the shift in US trade policy toward a more protectionist stance.

Gentiloni said a meeting of Group of Seven leaders in Sicily at the end of May had to “take a clear position on an issue about which there can be no ambiguity. We have to reiterate our confidence in the open economies and societies on which we have built decades of prosperity,” he said.

“We have to restate our backing for free markets and free trade, the most powerful engines of economic growth in history.”

Italy’s exports to the US in 2016 were worth €37 billion ($39.46 billion), just over 10% of the EU (including Britain) total of €362 billion.

However, the products reportedly targeted only make up a small part of the total: For example, the mopeds and motorbikes potentially affected accounted for €182 million of exports in 2016, compared with €4 billion for cars.

Trade disputes between the United States and Europe would hurt economic growth and global governance at a time when the West needs to show a unified front against unfair trade practices, Italy’s industry minister said on Friday.

“Any trade clash between the United States and Europe would be dangerous not only for our economies, but also for the rules that govern globalization,” Industry Minister Carlo Calenda told reporters in Rome.

Calenda said western countries should refrain from trade disputes “that would symbolically show a division at a moment when the western world should be unified in protecting its citizens from unfair trade practices”.

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