Italy Lobbying U.S. to Ward Off Trump Europe Tariff Threat

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(Bloomberg) --

Italy has reached out directly to the U.S. in a bid to avoid a new set of tariffs that could hit as soon as Friday, in a sign of the delicate economic environment facing European nations.

Ivan Scalfarotto, undersecretary at the foreign ministry, told Bloomberg in an interview that Italy deserves special treatment because it’s not part of the Airbus SE consortium at the heart of a long-running trade dispute between Europe and the U.S. He discussed the issue with U.S. officials last month.

“We’re doing everything possible to limit the impact on Italy, but the Americans have the upper hand,” said Scalfarotto, from the small Italy Alive party led by ex-premier Matteo Renzi. “Italy isn’t part of the Airbus consortium, and tariffs will have a cost for American companies, restaurants, families.”

Washington could soon announce levies on a new tranche of European goods. Last fall, the World Trade Organization said the U.S. could legally impose tariffs on $7.5 billion worth of European exports in retaliation for Europe’s aid to Airbus.

In October, the U.S. imposed 10% duties on Airbus aircraft and 25% tariffs on a range of European consumer exports including Scotch whiskey, French wine and Spanish olives.

Scalfarotto pressed Italy’s case in Washington in late January, meeting with senior officials at the White House, the State Department, the Commerce Department and the U.S. Trade Representative, as well as lawmakers from both houses of Congress. He said they gave him no assurances.

“If the Americans hit Italy unfairly, this doesn’t help with Italian public opinion toward the U.S.,” Scalfarotto said, adding that his visit to Washington was part of normal bilateral relations, and that Italy is also working through the EU to seek a negotiated solution.

Italy is in danger of missing its already unambitious growth targets for 2020 because of the coronavirus outbreak, Deputy Finance Minister Antonio Misiani said in an interview on Wednesday. The government targets 0.6% growth for this year, and output unexpectedly shrank 0.3 percentage points in the final quarter of 2019.

Scalfarotto said U.S. officials he met with in Washington asked about Italy’s position on fifth-generation mobile networks as well as about relations with China.

The U.S. has repeatedly pressed allies to ban Huawei Technologies Co. from Italy’s 5G networks and has criticized Italy for joining the Belt and Road global infrastructure project last year.

“I told them that Italy is firmly in the Atlantic camp,” Scalfarotto said. “Trade is one thing, the alliance with the U.S. is another.”

©2020 Bloomberg L.P.

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