Tariffs, if Europe acts united, the 30% doesn’t scare

It’s the numbers that speak clearly, and they could provide the right push for Italy’s contribution to the negotiations that the European Union—represented by EU Commissioner for Trade and Economic Security, Maroš Šefčovič—is carrying out with the Trump administration, aiming to prevent the introduction of tariffs that would clog the engine of Western trade.

The impact on Italian exports

The Confindustria Research Center estimates that, in a worst-case scenario where the U.S. imposes 30% tariffs on all European products, Italian exports worldwide would drop by only 6%. Still using this worst-case lens, if indirect connections are also considered, Italian manufacturing output would decrease by 4%. Regarding GDP, indiscriminate 30% U.S. tariffs would lower Italy’s GDP by 0.8%. These are certainly unwelcome figures for Italian businesses—but hardly ones that could scare a country expected to export around €630 billion in 2025 (Istat forecast).

The impact on EU exports

The European—and Italian—hope in this negotiation with the U.S. remains the well-known zero-for-zero (zero tariffs across the West), repeatedly advocated by Italy’s Foreign Minister, Antonio Tajani. But the EU’s proposal to the U.S. goes further: to begin building a transatlantic single market that would also include Canada and Mexico. Obviously with zero tariffs.

How to reorganize European exports

In the event of a negative outcome (i.e. 30% tariffs), the EU would need to partially rethink its export strategy. One way would be to accelerate the completion of the European Single Market, which still remains an untapped gold mine. Again, the numbers support this reasoning: EU exports to the U.S. amount to around €530 billion, about 20% of total extra-EU exports. But more importantly, this figure is less than one-eighth of the more than €4 trillion in intra-EU trade value—a figure that receives far too little attention.

What to focus on to complete the European Single Market

Although services account for about 70% of EU GDP, cross-border trade in services still makes up only 25% of total EU trade. This is the real untapped vein in the mine of European commerce. Completing the harmonization of national regulations would be the first and most crucial step toward unlocking this treasure. Add to that the automatic recognition of professional qualifications across all Member States, full digital union (content, e-commerce, data), the completion of the Capital Markets Union with financial integration and common rules, the structuring of a single energy market, and coordinated fiscal and regulatory policies—and the game would be won. In one move, the European Union would be completed and international trade would take off—as previously emphasized by both Enrico Letta and Mario Draghi.

It’s great to show unity in Washington. Even better to show it in Brussels. Either way, it will be a success.