Rome – Italy is committed to acting as a «bridge» between the USA and Europe to avoid the «tariff war» threatened by President Trump that «would harm both Americans and us». But if the US President were to go ahead, we «will not be caught unprepared: we are already working to find solutions that will not cause a crisis for our companies and the well-being of our citizens». Antonio Tajani, Minister of Foreign Affairs and Foreign Trade, is worried about the turn that the global economic balance could take due to Trump’s threats, but he wants to reassure everyone.
It seems that Italy and Europe are waiting for the executioner’s axe or hoping for an act of clemency.
«We are not playing a waiting game. Firstly, because we are Europe’s best ambassadors to the United States, due to the excellent relations we have built. Secondly, because we know how to react».
How is the role of ambassadors played?
«Facts speak for themselves. A war is of no use to anyone. No other economy in the world is as integrated as the US-EU one. European companies in the USA employ 3.5 million Americans. Another million American jobs depend directly on trade with Europe. Two-thirds of all American assets abroad are in Europe. The United States supplies over 50% of our LNG. The volume of EU-US trade is 1.5 trillion euros, which accounts for 30% of global trade. There is much at stake for both sides».
Would it therefore not make sense for President Trump to impose tariffs?
«It is clear that we will need to negotiate. It seems to me that Trump is giving the first signs of willingness to negotiate: look at the case of Mexico, at the agreement that was reached yesterday. We all know very well that trade in all countries in the world, including the USA, is kindled by free movement of products, ideas and people. Business needs everything except barriers, both material (walls) and immaterial (tariffs). History teaches us this: the Republic of Venice became hegemonic in trade between East and West and towards the North also because there were no tariffs».
What is the risk of an increase in tariffs?
“The first is what President Trump himself announced he wanted to reduce, namely inflation. Tariffs on imported goods are obviously passed on to sales prices, increasing them».
So how will you react if President Trump goes ahead anyway?
“Italy has a particular position. It is the second country in terms of variety of export goods after China. For this reason – and we are already doing so in the negotiating tables opened with industries and producers – we need to work to explore new markets. We have a strategic plan for Mexico, India, Indonesia, Vietnam, the Gulf countries, the Far East and Africa. There is a business plan already at an advanced stage».
In short, should we limit trade with the USA?
«No, we need to collaborate, to meet halfway. We need to buy and invest more in America so that they do the same. Our Defence already has very close relations with the USA and all of Europe should converge towards a common Defence to be able to take action together».
Even by increasing military spending, as Trump is asking?
«We are willing to reach 2%, certainly not 5%, also considering that we are the country with the most soldiers on missions. This can be done by separating the expenses from the Stability Pact, issuing Eurobonds and also drawing on funds from the Next Generation EU and those of the ESM that have not been used».
And if that were not enough?
«In Italy, we have all known for some time that we need to reduce production costs to make our products competitive. This will also be decisive in the event of the introduction of tariffs. To reduce production costs in Europe, a real industrial policy is needed that cuts bureaucracy and energy costs, which could in fact “sterilize” the increase in prices due to tariffs».
How? The easiest way is to cut jobs…
«This is to be absolutely avoided. This is the reason why we think we need new rules that are less binding than the rules on climate change; less bureaucracy, for every new rule that is enacted, two must be repealed. We also need a change of pace from the ECB, which must work more closely with the EU, also in terms of the relationship between the euro and the dollar».
Will Italy also take action alone, having a privileged relationship with the USA?
«We want to be a bridge. Each country obviously has its own products that it possibly defends individually, as has been the case so far. But it is much better to take action together».
Are you also saying so to the opposition and the judges, who — in your opinion — are fiercely attacking you?
«These are facts. We only want to reform the justice system to make it more efficient and fair. We are not waging war on anyone. A justice system that works, that is is fast and safe, is another fundamental piece to increase the country’s economic weight and attract investment. It should be a primary objective for everyone».