Global Insight | November 2025

Trade War Fears Cast Shadow Over Italian Luxury Exports

Italian fashion and luxury brands face mounting uncertainty as global trade tensions and potential US tariffs threaten their crucial export markets.

Following years of disruption from COVID-19 and geopolitical conflicts, some uncertainties are either fading or becoming part of ordinary business. However, the potential for US-EU tariff battles and Italy’s heavy dependence on energy imports present new concerns for mid-sized exporters.

The Tariff Threat

“The outcome is still very uncertain with all the global tensions,” warns Alessandro Fornara, partner at Nexia Audirevi in Italy, noting that the resolution of these issues will be a key factor for economic health. “The whole tariff uncertainty is adding stress to an already precarious situation.”

The luxury and fashion sectors are particularly exposed. “The hardest hit industry is the luxury business, which is barely hanging in there,” explains Annalisa Vitali, also a partner at Nexia Audirevi. “Especially fashion — they’re huge exporters, so the tariff uncertainty is adding stress.”

The concern extends beyond outgoing tariffs. Counter-tariffs from the European Union in response to US trade actions could significantly affect Italy’s imports, particularly in the energy sector where the country remains heavily dependent on foreign supplies.

Mid-Market Vulnerability

Smaller companies face challenges that differ from multinational corporations with diversified operations. The uncertainty could impact both their valuations and deal-making activity if businesses don’t prepare proactively.

Hedging Strategies

Italian companies have options for hedging their exposure. Cross-border acquisitions in stable markets can help diversify their revenue streams. Vitali notes that tariffs “may create a frenzy of overseas deals because entrepreneurs are going to want to invest in the United States to work around tariffs.”

Securing financing, while Italian banks remain liquid and supportive, provides options for businesses. Italian banks have traditionally been quite liquid, with a high rate of savings per capita compared to other European nations.

Uncertainty isn’t disappearing any time soon for the mid market. While some uncertainties from recent years are fading, tariff changes are creating new ones. Businesses that prepare proactively may be less exposed than their competitors when risks materialise.