Vespa wars: Italy fears sting of Trump trade barriers

Italy on Friday voiced alarm over Donald Trump's plans to target imports responsible for the US trade deficit, amid fears products like Vespa scooters could be hit by punitive duties.

"Trump declares war on the Vespa" said a headline in national daily Il Messaggero, reflecting the tone of most of the media coverage on an issue that dominated front pages and topped news bulletins.

The alarm followed reports that scooters and motorcycles feature on a 'blacklist' of 90 European products earmarked for the imposition of 100 percent duties as Trump prepares to launch an offensive against "trade cheats".

The US president was due Friday to issue two executive orders instructing staff to pinpoint goods and countries responsible for the near $50-billion deficit and to recommend action.

Commerce Secretary Wilbur Ross said officials would be looking for evidence of "cheating," inappropriate behaviour, trade deals that have not lived up to their promise, lax enforcement, currency misalignment and troublesome World Trade Organization (WTO) constraints.

The European products are vulnerable to potential measures because of a transatlantic dispute over Europe's ban on beef produced with the aid of hormones that pre-dates Trump coming to power.

Along with mopeds, the symbolic Italian products that could have punitive duties slapped on them reportedly include tomatoes in every form, salami and Parma ham, and San Pellegrino mineral water, now owned by Switzerland's Nestle.

Italian Prime Minister Paolo Gentiloni Friday voiced concern over the shift in US trade policy towards a more protectionist stance.

Gentiloni said a meeting of Group of Seven leaders in Sicily at the end of May had to "take a clear position on an issue about which there can be no ambiguity.

"We have to reiterate our confidence in the open economies and societies on which we have built decades of prosperity," he said.

"We have to restate our backing for free markets and free trade, the most powerful engines of economic growth in history."

Italy's exports to the United States in 2016 were worth 37 billion euros, just over ten percent of the European Union (including Britain) total of 362 billion euros.

However, the products reportedly targeted only make up a small part of the total: for example, the mopeds and motorbikes potentially affected accounted for 182 million euros of exports in 2016, compared with four billion euros for cars.

Although reports of the blacklist hit shares in Vespa manufacturer Piaggio, the company stressed that US sales represented less than five percent of its total turnover, and that it could export from its factories in Vietnam if the duties are imposed.

That would, however, raise fears for jobs at the company's Italian production centres and any ban on food products could be very damaging to producers of upmarket niche products like San Daniele hams.

source: AFP