Italy advocates EU-US trade deal as tariff dispute threatens exports

Italy’s Prime Minister Giorgia Meloni has called on the European Union to establish a free-trade zone with the United States as a way to move past ongoing transatlantic tariff disputes. She also urged the EU to adopt the trade agreement it reached with the US last summer, which was thrown into confusion after the US Supreme Court invalidated part of former President Donald Trump’s authority to impose tariffs.

“I consider the tariffs between Europe and the US a mistake,” Meloni told Bloomberg in an interview this week. “We should go in a diametrically opposite direction — we should move toward a free-trade area.”

Talks on a EU-US free-trade zone were abandoned in 2016 after efforts to significantly lower tariffs and reduce non-tariff barriers met with strong opposition in several EU member states, particularly regarding how agricultural products would be treated, which proved an insurmountable obstacle.

Meloni has carefully navigated her relationship with the Trump administration, seeking to maintain a positive working rapport with the former president while representing Italy’s interests. She highlighted Italy’s role in the EU-US trade accord finalised last summer and stressed her clear stance on tariffs, noting that the US is Italy’s second-largest export market.

“We’ve tried to ease the situation as much as possible, in short, to seek an agreement that’s sustainable and reasonable,” Meloni said.

Last week, the US Supreme Court struck down Trump’s so-called reciprocal tariffs, removing a central element of his economic policy and creating uncertainty with trade partners. In response, Trump imposed a global 10% levy on top of existing most-favoured-nation tariffs. Bloomberg reported that the new rate would subject about €4.2 billion ($5 billion) of EU exports to tariffs above the 15% ceiling agreed in the EU-US trade accord. Italian goods are among those now facing rates above the maximum 15% or losing previously exempt status, according to sources familiar with the matter.

Political momentum for a full EU-US free-trade zone waned by the time Trump assumed office in his first term. The allies instead attempted to foster cooperation through the Trade and Technology Council, a forum that produced limited tangible results.

Meloni said she has communicated her concerns over tariffs directly to Trump, emphasizing that the trade dispute is “not a functional decision.”

“We should try and use what happened to try to move in a diametrically opposite direction,” she said. “But it clearly takes two to do that.”

By Tamilla Hasanova