Turning Tariff Threats into Opportunity: How Italian Business Can Succeed in a Market Dominated by U.S. Trade Tensions

Turning Tariff Threats into Opportunity: How Italian Business Can Succeed in a Market Dominated by U.S. Trade Tensions

Over the past two decades, Italy’s wine and food industries have strengthened their business in the U.S. market. Italian wine exports alone have tripled in dollar value, now generating over €2 billion annually. Even last year, with global economic uncertainty, exports to the U.S. still grew by nearly 7%, according to Coldiretti, Italy’s main farming lobby.

But with talks of new tariffs from the Trump administration on Italian wine and food, many entrepreneurs are panicking. The reality, however, is that while these threats are causing short-term challenges, they can create new opportunities especially given the unprecedented strong relations between the US and Italy.

Why Italy and the U.S. Are Closer Than Ever

Italy-U.S. relations, under Prime Minister Giorgia Meloni and Donald Trump have become one of the strongest alliance in recent history. Prime Minister Meloni was the only European leader invited to Trump’s inauguration, a clear sign of their close relationship. The Italian Prime Minister has de-facto become the White House extension in Europe negotiating on behalf of President Trump. As an example, in the difficult Ukraine coordinating EU phone call of March wed 19th, Mrs. Meloni was advising her EU partners against tariff retaliation against the US.

The US/Italy partnership could be a major advantage for Italian businesses, small and large. While the U.S. may use tariff threats as a negotiation tool, it’s unlikely to let them affect its political ties with Italy, particularly now that the US lacks the broader EU trust on transatlantic relations. In fact, the U.S. will probably pursue bilateral agreements with Italy, protecting key sectors like wine and food from broader EU-U.S. disputes.

For Italian entrepreneurs, this means that it is time to act, and not wait for the potential bad news to occur.

Don’t Get Distracted by the Noise

Let me assure you, the news cycle will be continuing to be filled with bombastic headlines, conflicting reports, and speculation. This is what sells today, and if you want to get deeper on this, read the great book “The Power of Bad” by John Tierney and Roy Baumeister.

Tariff talks are often part of posturing and negotiation tactics. The U.S. will likely continue using these threats to gain leverage, but much of it is political posturing. Getting lost in the noise can lead to analysis paralysis, making you slow to act and potentially miss bigger opportunities that emerge when most people panic.

Stay focused. Use this time to innovate, over-engage with your partners, and push into new markets and segments of your business. While competitors sit and wait, you can be expanding and building new relationship and gaining new market share.

Historical Data Is on Your Side

It’s also important to remember that history suggests the food and beverage sector is unlikely to be significantly affected. During previous U.S.-EU trade disputes, tariffs on Italian wine and food were often more of a bargaining chip than a long-term reality.

Even when tariffs were imposed in the past, consumer demand for Italian premium products in the U.S. remained strong. Italian wine commands a very strong brand equity, and consumers tends to stick to Italian brands no matter how expensive they get. The combination of brand loyalty and the luxury positioning of Italian products makes them less vulnerable to price shift. This means the most likely outcome is that any new tariffs, if they occur, will have minimal impact on overall sales.

The U.S. Needs Italian Wine More Than Ever

Here’s the thing: the U.S. relies heavily on Italian wine. It’s largest market for Italian producers, and American consumers have a clear preference for high-quality, authentic Italian products. Even with potential tariffs, the demand isn’t going anywhere.

In fact, a price hike might even work in Italy’s favor. Italian wine has a strong reputation for quality, and many U.S. consumers are willing to pay a premium for it. With the right strategy, higher prices could actually boost the perception of exclusivity, and drive more sales. What may suffer are the more affordable products such as prosecco which are typically available for less than 20$ a bottle across the US.

Develop a Risk Management Strategy

While Italian entrepreneurs should remain optimistic, they must also be prepared for market volatility. Tariff disputes, executive orders, and political uncertainty will continue to create an unpredictable business environment.

Building a robust risk management strategy is essential to ensure business continuity.

Here’s how:

• Turn Wine into a Luxury Experience: If tariffs drive prices up slightly, use it to your advantage. Frame Italian wine as a premium experience, emphasizing its heritage and quality to position them as the only choice to make.

• Strengthen Supplier and Partner Relationships: Negotiate more flexible contracts with distributors and suppliers to ensure you can quickly adapt to changing conditions.

• Build a Culture of Risk Management: Work with advisors who can help you anticipate policy shifts and develop comprehensive business continuity strategies in advance.

By putting these measures in place, you’ll be better positioned to handle the inevitable market fluctuation and instability which is likely to continue for some time.

Final Takeaway: Play Offense, Not Defense

Yes, tariffs might create some short-term challenges, but Italian entrepreneurs have a real advantage. The strong Meloni-Trump partnership makes it likely that Italy will secure very favorable trade agreements, which will allow the U.S. demand for Italian products to stay strong. President Trump will continue to advocate and market the Italian-US robust partnership and in so doing continue to promote the Italian brand.

Don’t waste time obsessing over the headlines. While others react to the bad news cycle, over engage with your users, build new partnership and get comfortable with the uncomfortable.