The United States and Italy cooperate closely on important economic issues, including within the G7. The United States is one of Italy`s largest trading partners, with a share of $103.12 billion in goods and services in 2019. As a member of the European Union (EU), Italy is bound by EU treaties and laws, including those that have a direct or indirect influence on business investment. Under the right to establish the EU Treaty and the Friendship, Trade and Shipping Agreement with the United States, Italy is generally required to grant national treatment to US investors based in Italy or another EU Member State. Both countries have adopted an income tax convention to avoid double taxation. As part of the agreement, the EU will remove tariffs on imports of live and frozen lobster products into the United States. U.S. exports of these products to the EU totaled more than $111 million in 2017. The EU will abolish these tariffs retroactively to 1 August 2020 on the basis of the Most Favoured Nation (MFN).
EU tariffs will be abolished for a period of five years and the European Commission will work to make tariff changes sustainable. The United States will reduce its annual tariffs by 50% on average for certain EU exports, including certain prepared meals, some crystalline glasses, surface preparations, greenhouse gas powder, cigarette lighters and lighter parts. ZOLL reductions in the U.S. will also be based on the MFN and will be retroactive to August 1, 2020. Moreover, U.S. tariffs on steel appear to be only the first step in a broader trade strategy. Trump has already announced an investigation into imported cars that would harm Italian exports far more directly. Another likely objective of U.S. trade policy could be the agri-food sector, where the country is very loss-making and is a very important sector for Italy in this market.
The main sector of Italian exports to the United States is transport vehicles, which account for nearly a quarter of the total in 2017, followed by machinery, textiles, clothing and leather goods, as well as food and beverages.