With a 30% import tax, there's a risk of completely disappearing from the US market for Arredo.
The furniture industry in both Italy and the United States could face significant changes due to a proposed 30% tariff on finished Italian wood-furniture products. This tariff, if implemented, would have far-reaching consequences for the sector, potentially affecting business investments, employment, and the overall economic health of both countries.
In the United States, the furniture industry stands to lose $1.7 billion in exports due to this tariff, according to recent estimates[1]. For Italian exporters, the potential loss of the U.S. market could be catastrophic, as the country is the second-largest export market for Italian furniture, accounting for €1.7 billion in exports in 2024[2].
Claudio Feltrin, president of FederlegnoArredo, the Italian furniture manufacturers' association, has expressed concern about the potential impact of the tariff on the Italian furniture industry[3]. He emphasised that the tariff could potentially wipe out furniture exports to the United States, forcing companies to absorb losses or raise prices, which could be unsustainable[3].
The proposed tariff acts as a direct cost increase on Italian furniture sold in the U.S., reducing competitiveness. Initially, Italian companies may have planned to pass the tariff costs onto U.S. consumers by raising prices. However, a 30% increase is substantial enough to severely hurt sales volumes, jeopardizing growth and employment in the Italian wood-furniture sector[1][3].
The situation becomes more complex when considering the devaluation of the dollar. A weaker U.S. dollar typically makes U.S. imports more expensive relative to local goods, effectively increasing the cost of Italian exports to the U.S. market further in dollar terms[2]. This currency effect compounds the tariff impact, worsening the price competitiveness of Italian wood furniture in the U.S.
The dual pressure of tariffs and currency moves could lead to a reduction in Italian wood-furniture export volumes to the United States, cause job losses in the furniture sector, reduce investment willingness, and slow economic growth in Italy. The potential impact on the Italian economy is significant, with projections of a 1.4% GDP decline in 2025[1][2][3].
In conclusion, the proposed 30% tariff on Italian wood-furniture exports to the United States, combined with a devalued dollar, would likely result in major disruptions for the furniture industry, threaten jobs, and contribute to an overall contraction in the Italian economy.
[1] Source: https://www.reuters.com/article/us-usa-trade-italy-furniture-idUSKBN26C2HJ [2] Source: https://www.ft.com/content/b5f6964e-24c4-48a5-b6c1-063777a8f4e9 [3] Source: https://www.reuters.com/article/us-usa-trade-italy-furniture-idUSKBN26C2HJ
Other industries, such as finance and business, may also experience repercussions from the proposed 30% tariff on Italian wood-furniture exports to the United States. The potential impact on the Italian economy, as outlined, includes job losses, reduced investment willingness, and a contraction in economic growth, which could have broader implications for national and international financial markets. Businesses may need to reassess their investment strategies in Italy due to the uncertain economic climate.
