Analysis by Carlos Mosca
Prime Minister Giorgia Meloni’s headline-grabbing meeting with U.S. President Donald Trump and Vice President JD Vance has lit a match under Italy’s already delicate geopolitical position.
A move cloaked in nationalist rhetoric and post-EU realignment ambition, it purports to advance Italian influence on the global stage.
But beneath the choreography of bilateral pageantry lies a potentially catastrophic blow to Italy’s economic fabric, cultural capital, and social cohesion.
Giorgia Meloni’s Diplomacy: Between Sovereignty and Subservience
Italy’s pivot toward Trumpist America is a diplomatic theatre.
While attempting to project sovereignty from the grip of Brussels, Meloni is, in fact, positioning Italy as a junior partner in a U.S.-centric realignment that has no room for compromise.
The $10 billion in proposed Italian investment in the United States — in energy, defence, and infrastructure — can be seen as a great opportunity for some but it has many other worried. And for the right reasons, possibly!
It suggests a belief that Italy must invest elsewhere to be heard.
The news has already been circulating that in order to secure a strong alliance with the U.S., energy costs “will have to rise“. And it is sold a measure to make Italy great again by renouncing one form of subservience for another.
Once again, Italy reveals its unique and historically-proven capacity to simultaneous appeal to nationalist pride while eagerly subjugating itself to foreign agendas.
Historically, I doubt this ever bore the expected fruits.
Exporting Capital, an uncertain game
Italian micro and small businesses (which make up over 90% of the country’s manufacturing ecosystem) may not see the benefits from this transatlantic courtship.
How about gaining some special treatment?
The Italian SME fabric are neither equipped to move operations to the U.S. nor to navigate its costly, fragmented regulatory environment.
And, to date, I haven’t seen anything -among the odd decisions taken while the tariff sage goes on- that announces preferntial entry to Italian goods into the US.
I have seen more control over the narrative of American history than preferential treatment of Italian goods.
Not fashion — I’m talking about the essentials: wine, olive oil, and regional foods. The very beating heart of ‘Made in Italy.’
In contrast, larger firms with pre-existing international structures may gain tax incentives and tariff exemptions.
For the rest — especially traditional artisans, family-run workshops, and local producers with online presence and international outreach thanks to COVID — the fallout may be exclusion, and increased costs to keep the businesses running.
There could be two scenarios:
Scenario 1: Italian corporations such as Eni and the like, invest more to buy American energy.
This would lead to a further increase in fuel costs.
This would mean higher costs on the final consumer. Which is what happened to the UK with the cost of living. Not a good outlook let me tell you.
Scenario 2: Italian companies are invited to move their production to the US.
As production potentially shifts abroad, the design and concept of the “Made in Italy” may remain in Italy, relieving Italy of most of its manufacturing labour.
The very soul of Italian craftsmanship, rooted in regional knowledge, may merge or be enriched by a more US-based labour and know-how, making a hybrid “designed in Italy, made in the USA”. Possible.
Anyone with experience in international trade knows the first scenario is more likely in the short term, while the second is more feasibly in the medium to longer term.
Let us humour ourselves with a third scenario: full-on collaboration between Italy and Trump’s America. Let’s explore this scenario together.
1. Labour Realities: Designed in Italy and Made in the USA
In an ideal third scenario, the investments could be from Italy-based companies toward the U.S., making somehow use of U.S. Labour.
U.S. labour costs are, on average, significantly higher than those in Italy.
Nevertheless, artisanal craftsmanship is one of the most expensive in the world.
And for a reason.
1. Italy already has the highest energy costs in Europe, which directly impacts production costs.
2. While not the highest globally, Italian labor costs are higher than in many other countries, especially when considering the benefits and protections afforded to workers.
3. Italy excels in sourcing and using premium materials like silk, leather, and wood.
4. Italian artisanship is renowned for its meticulous attention to detail and the mastering of tradtional techniques
In this third potential scenario, how could all the above be reached in the short term by the U.S. Administration?
A de-unionised workforce? Lower environmental standards? Tax breaks and right-to-work laws?
How could the skills be passed onto the new generatio of American workers? Would AI replace craftsmanship?
Would all the Italian artisans move to the USA?
Even if American labour could be made cheaper, it would come at the cost of worker protections — and the same calculus could eventually be imposed upon Italian workers.
Italy’s job market is already plagued by systemic inefficiencies: widespread underemployment, rampant nepotism, and politicised union power structures. The exchange of employment for votes — an old vice in Italian politics — remains largely unaddressed by any political class. If anybody claims the opposite, they are lying.
And I won’t go into the curious case of job vacancies fabricated to let selected people into Public Aministration jobs, from mere bureaucracy to education and health-care.
Any of the current government’s rhetoric of meritocracy has yet to be substantiated by structural reforms.
The notion that aligning with Trump will fix this is, nevertheless, fanciful.
2. Would the current Legal Labyrinth for ‘Made in Italy’ Wine and Food remain?
In such third scenario, SMEs may still be able to produce in Italy and hopefully have a preferential entry to the American market. Why would this be important?
The U.S. alcohol and food regulatory system is a minefield. For anyone in Italy involved in e-commerce and shipping to the US, this will probably resonate.
Each state governs alcohol sales differently: from outright bans on direct-to-consumer wine shipping (e.g., Utah, Alabama) to labyrinthine control state regimes (like Pennsylvania), the entry costs are high.
Small Italian wineries and agri-food exporters will need multiple licences, legal counsel, and local partners just to sell a bottle or wheel of cheese. “We don’t need new markets across the Atlantic,” said to me Luca De Santi, a fifth-generation cheesemaker in Puglia, in one of our chats about internationalisation “We need to be able to sell to them without three lawyers and a thousand-dollar license”.
Further, if Trump reinstates punitive tariffs — as he did during his first term – or if more requirements will be necessary to enter the US market and as it seems to be the case, Italian exports could collapse in mid-tier markets.
The likely outcome: ‘Made in Italy’ becomes boutique for the ultra-rich or is replaced by domestic substitutes in American supermarkets.
3. High Fashion: Pivoting West, Losing East
In this ideal third scenario, the high fashion -already terribly under pressure if you read any articles on The Pulse- would move West, to appease the “western nationalism” that the Italian Prime Minister talked about during the Italy-US meeting. Let’s take a look at what this mean.
In 2024, 18.7% of Italian luxury exports went to the U.S.; 28.3% went to China and its allied markets. In a recent analysis from the Italian Office of Statistics (ISTAT) China represents an important ally for Italy’s export of know-how in green economy, infrastructure and agricultural technologies.
Meloni’s Trump overtures risk alienating a critical, growing consumer base in Asia — a region far more sensitive to perceived slights and Western posturing than Washington policymakers appear to understand.
In this scenario, Italy risks the worst of both worlds: a diluted brand identity in the U.S. and an exodus of loyalty from Asian distributors and consumers.
And if production moves west to comply with ‘Buy American’ standards, high-end American retailers may keep using the ‘Italian’ brand — but the artisans and tailors of Milan and Florence won’t see the returns.
The Made in Italy is already dependent on Chinese Investment. What’s the strategy?
As of April 2025, Chinese capital is already deeply embedded in key Italian sectors. State-linked firms hold a controlling stake in Pirelli (37%, via Sinochem) despite the recent anti-Chinese rhetoric, while others are acquiring heritage brands like Bialetti (€53 million acquisition by NUO Capital).
Italy’s exit from the Belt and Road Initiative hasn’t halted the flow of Chinese money — it’s merely changed its routes.
The Italian Prime Minister’s flirtation with Washington risks unsettling this balance, with Beijing unlikely to respond passively to perceived realignments.
Could a Bold Reform Break the Legal Barrier?
In the most optimistic version of this alliance, the U.S. President — with Italy’s Prime Minister’s backing — could push for federal-level harmonisation of import regulations specifically for allied nations like Italy.
This would mean sweeping away the patchwork of state-level alcohol laws, food safety approvals, and distributor licenses that currently make U.S. market entry prohibitively complex for small Italian producers.
Such a “Made in Italy Accord” could allow direct-to-consumer sales across all 50 states, eliminate redundant certifications, and fast-track artisanal imports.
While this would be revolutionary it’s not inconceivable under a Trump administration eager to bypass the EU and reward bilateral loyalty.
If Italy became the first EU nation to secure this kind of blanket exemption, it could create a historic opportunity for SMEs exporting olive oil, wine, cheese, and ceramics.
The result: a renaissance of Italian rural entrepreneurship aimed at American tables.
A Sovereignty Illusion with Economic Teeth
I have humoured the readers with a third possible scenario. The truth is that the first scenario in the short run and a second scenario in the medium term are going to be more likely.
What will this mean? Workers will not benefit. SMEs will not benefit. The only short-term winners will be those with the capital to exploit tariff loopholes and jurisdictional arbitrage.
As for the rest of the country — let’s wait and see.
The real question is whether Italians will recognise the cost of outsourcing their own narrative — before it’s too late.
