The luxury fashion industry in Italy, a cornerstone of the national economy, is facing a looming threat from possible U.S. tariffs under the administration of former President Donald Trump. This uncertainty emerges at a critical time, coinciding with a global contraction in luxury sales and significant challenges for the sector.
Citing concerns, Carlo Capasa, the President of Italy's National Fashion Chamber, has actively reached out to the Italian government to shield this vital industry from potential economic repercussions. Speaking at the unveiling of the upcoming Milan Fashion Week event calendar, Capasa underscored the gravity of such trade measures. He stated, If Trump penalizes the second industry in Italy, it is a pretty hostile declaration.
The fashion sector is indeed a critical part of Italy’s economic framework, contributing a massive 5% to the nation's Gross Domestic Product (GDP), translating to about 75 billion euros, or approximately 78 billion U.S. dollars. According to research by the state development bank CDP, this domain provides employment opportunities for approximately 1.2 million individuals, encompassing the production and distribution of textiles, apparel, backpacks, footwear, as well as accessories like jewelry, eyewear, and leather goods.
Despite the fact that President Trump has not outlined any definitive plans, these potential tariffs aim at all European imports, thereby fuelling anxiety within the industry. Moreover, the timing is complicated given the luxury market's current shrinkage. Data from Italy's fashion sector reveals that global sales took a 5% hit in 2024, falling from 110 billion euros in 2023 to 96 billion euros.
Italy's export strength remains noteworthy, with the country sending 4.6 billion euros worth of luxury goods to the United States last year. This includes a range of products such as clothing, shoes, leather accessories, and more. Despite ongoing global economic challenges, these exports have shown resilience. Italy ranks just behind France and Germany, who recorded 7.6 billion and 4.7 billion euros in Italian luxury exports to the U.S., respectively.
Furthermore, the first 10 months of the previous year exhibited a 2.5% increase in exports year-over-year, bringing total Italian fashion exports to 91 billion euros, according to statistics from the Italian National Fashion Chamber. Despite a drop in global sales, the industry is eagerly trying to reinforce a stability reminiscent of pre-pandemic figures, where sales hit 90 billion euros in 2019.
The luxury fashion sector in Italy does not merely represent an economic variable; it is entwined with cultural identity and global reputation. As the world anticipates further developments regarding the proposed tariffs, Italian fashion houses continue their efforts to maintain competitiveness and innovation in an unpredictable economic climate.