The recent US presidential election of the Republican candidate Donald Trump has raised several doubts within the international business community, given the views and the future projects outlined by the president-elect during his electoral campaign, in particular with regard to the commercial policy and the willingness to renegotiate all of the existing free trade agreements. It is clear that the Transatlantic Trade and Investment Partnership, known as TTIP, the bilateral trade agreement, currently under difficult negotiations between the USA and the EU, is likely to be put on hold until the new Presidency announces its position on the matter.
At first, this situation may seem to present a negative outlook for overseas economic and commercial relationships. However, the economic reality and the strength that this relationship has always had would lead us to consider that the transatlantic axis will remain central to foreign policy, even with some changes of focus with respect to the past as happened in 2009 with the beginning of the Obama Administration.
Historically, Italy has strong commercial relationships with the USA, as indicated by the level of exports to the USA, which exceeded US$44 billion in 2015, placing it as one of the main commercial partners of the USA, as well as being one of the most active investors on American territory over recent years. Various leading companies have established and increased their international presence and commercial leadership through direct investments in the USA, such as Sofidel, Barilla, SATA, Italmatch and DiaSorin.
The excellence, quality and the strength of Italian businesses will always remain the key drivers to overseas expansion, trusting in the new Administration’s willingness to facilitate smooth business relationships while protecting American workers as indicated by president-elect Trump during his campaign.
With regard to internal politics, Mr. Trump would seem directed towards intervening in the taxation system to reduce company taxes, which today are amongst the highest in the world. In this area president-elect Trump will likely find cross-party consensus. The consequence of this will hopefully create a further boost to internal consumption with a positive effect on employment levels for the middle/working class population. Financial markets, after the initial shock of the election result, seem to believe that this scenario will happen.
Overall, despite the strong claims made during the electoral campaign, like his position on immigration, Mr. Trump will be much more cautious about adopting initiatives that could damage the American people, making it hard to imagine that any substantial changes could actually arise in economic relations between the USA and EU.
Also, given the willingness to boost commercial appeal of American firms, it is possible to consider that this will produce a renewed interest from America towards Italy, translating in the arrival of new businesses and investors, keen to explore the opportunities that a country like Italy can offer.
The geographical and geopolitical positioning of Italy are contributing to promoting Italy on the commercial radar of America, which if interpreted correctly will be possible to exploit them efficiently.
The Italian economic system is certainly able to respond positively to the new challenge that will start on January 20, 2017, the day in which the new Administration will officially take over. It is therefore necessary for all of the players, economic and social, to prepare for these changes through commitment and creativity, characteristics that have always identified Italy.
Lorenzo Parrini
Honorary Representative, American Chamber of Commerce in Italy
