With its large trade surplus and strong commercial ties with U.S. companies, Italy would face enormous economic risks if a lengthy trade war between the United States and the European Union (EU) emerges, according to a report released Thursday by Italian National Institute of Statistics (ISTAT).

In its 91-page 2025 edition of the annual Report on the Competitiveness of Productive Sectors, ISTAT said that Italy's economy has focused on exports over the past 15 years due in part to "weak or stagnating internal demand" for its production. In 2024, Italy emerged as the fourth most reliant EU country on external markets, following Cyprus, Ireland, and Malta.

"In recent years, in particular, Italy has oriented its export flows toward non-EU markets, especially the United States," the report said, noting that nearly half of Italy's exports were sold outside the EU, with around a tenth sold in the U.S.

Between 2019 and 2024, the U.S. market has seen a growing importance in almost all Italian manufacturing sectors. Italy's main exports to the U.S. include machinery, pharmaceutical products, cars and trucks, and beverages.

In 2024, Italy's trade surplus with the U.S. reached approximately 35 billion euros(37.94 billion U.S. dollars). Together with Germany's 85 billion euros surplus, the two countries account for about 70 percent of the European Union's overall trade surplus with the U.S., according to ISTAT's data.

The United States placed a 25 percent tariff on all imports of steel and aluminum and related products, including those from the European Union, effective March 12. Other tariffs are scheduled to go into effect in the coming weeks.

The European Union responded with its own tariff plan that was supposed to go into effect in early April, but on Thursday that plan was delayed until at least mid-April after U.S. President Donald Trump threatened to impose a 200-percent tariff on all wines, champagnes, and other alcoholic beverages from France and other EU member states unless the whisky tariff is lifted immediately.

Italian Prime Minister Giorgia Meloni earlier this week expressed doubts about the European tariff strategy, saying she feared sparking an all-out trade war with the United States. (1 euro = 1.08 U.S. dollar)