Trump's EU tariffs hit Italy, shake global markets

US President Donald Trump's newly imposed 20 percent tariffs on European Union (EU) imports have sent shockwaves through international markets, particularly hitting iconic industries in Italy — from olive oil to luxury furniture. The sweeping tariffs target key EU economies like Spain, Italy, Greece, and Portugal, with ripple effects extending far beyond the Atlantic, impacting trade and consumers worldwide, including those in the Philippines.

Italy's liquid gold under threat

Italy, one of the world’s leading olive oil producers, stands to be one of the hardest-hit nations. With olive oil exports to the US reaching $707 million in 2023, the 20 percent tariff threatens to disrupt years of growth in transatlantic trade.

The US, the world’s second-largest consumer of olive oil, heavily relies on imports from Italy and other Mediterranean countries. With the new tariffs, prices for Italian olive oil in the US are expected to rise sharply, prompting a potential shift among consumers toward cheaper alternatives like seed oils. Experts warn this could damage both health trends favoring Mediterranean diets and the profitability of olive oil producers.

While Italian exporters may look to new markets in Asia, Africa, and the Middle East, these regions could become oversaturated, suppressing prices and disrupting global supply chains.

Luxury furniture industry rattled

Beyond agriculture, the tariffs are rattling another prized Italian industry: luxury furniture. At the prestigious Salone del Mobile in Milan — the world’s largest furniture fair — Italian manufacturers voiced deep concern about the impact of Trump’s tariffs on their exports to the United States, their second-largest market after France.

Italian furniture exports to the US reached €2.2 billion ($2.4 billion) in 2024. About 10 percent of all Italian exports go to the US, so the implications are widespread. For luxury brands such as La Contessina and Villari, whose ornate creations can fetch tens of thousands of dollars, the tariffs could hit hard.

“We made it through COVID, we had the war in Ukraine and lost Russian clients, but we survived,” said La Contessina finance director Nicola Fagetti. “We are now facing tariffs, but we always find a solution,” he added, reflecting a stoic resilience common among Italian artisans.

“Americans are fascinated by Italian design — there’s a ‘Wow!’ effect when they see our products,” says Villari marketing director Emmanuel Antonello, who remains cautiously optimistic. However, American foot traffic at the fair has reportedly dropped, indicating early signs of reduced business interest from across the Atlantic.

Interior designer Allison Muir from San Francisco voiced her disappointment. “I will lose a lot of my clients. I think the tariffs are going to be enormously awful for trade,” she said, contemplating relocating her family to Spain in protest of Trump's policies.

Despite emerging markets like the UAE and Saudi Arabia showing promise, they have yet to fill the gap left by shrinking European and American markets. The industry saw a decline in revenue last year, dragged down by lower exports to France and Germany.

Impact on the Philippines

The Philippines, which imported $3.65 million worth of olive oil from Italy in 2023, is among the smaller but still significant markets expected to feel the effects of the global trade shift. As Italian exporters look for alternatives to the US market, Southeast Asia — including the Philippines — may see increased supply and volatile pricing.

Filipino consumers, particularly those who follow Mediterranean diets for health reasons, may face rising prices or a wave of lower-quality substitutes. Similar instability could also affect other European gourmet imports such as cheese and wine, as global trade patterns adjust.

The olive oil and furniture sectors represent just a fraction of the wider consequences of Trump's protectionist policies. His tariff-driven approach has already strained relations with China and now threatens to deepen divides with EU partners.

Italian Prime Minister Giorgia Meloni is scheduled to visit Washington on 17 April in a bid to negotiate relief or exemptions from the tariffs, as Italy scrambles to protect key exports and stabilize international trade relations.

As Italian exporters revise their strategies and global markets brace for further disruptions, it remains uncertain whether these efforts will be enough. The Philippines, like many nations caught in the middle, must prepare for continued market fluctuations and consumer impact.

For now, Italy’s most celebrated exports — from olive oil to elegant chaise lounges — remain caught in a geopolitical storm, with producers, traders, and consumers worldwide anxiously watching to see how far the fallout will spread.