S&P: solid Italian companies, but how will they react to Trump's duties?
Seventy per cent of the corporate issuers tracked by the rating agency have a 'stable' outlook and are in good health. But the promises of the new US administration threaten to turn the tables. Here's how
3' min read
Key points
3' min read
A greater solidity already tested in the most complex phases of the economic cycle in recent years, but also a series of unknowns from external factors. First and foremost, the issue of duties that could be imposed on exports to the United States with the return of the Trump administration. The picture painted by S&P Global Ratings on Italian companies is substantially stable, just as "stable" are the outlook for the debt of the 70% of issuers corporate followed by the agency in our country.
Italy does not represent a 'case' in this sense and tends instead to follow trends in neighbouring countries, with its inevitable strengths and weaknesses. Its companies "enjoy good health, in line with those in Europe, although there is no shortage of worrying factors", confirms Renato Panichi, Senior Director Corporate Ratings at S&P Global, ready in this last respect to point out without delay the trade tensions that would arise with the imposition of the feared US tariffs.
Watch out for possible US duties
.The analysis in this regard is, however, complex and also premature: "To understand what the final impact will be, it will first be necessary to know the details of the application of the measures, then the reaction of the companies themselves," the author of the Italian corporate outlook 2025 report, released during the conference presenting the rating agency's forecasts on the various categories of Italian issuers for next year, makes clear.
Among the variables to be taken into account mentioned by Panichi are, for example, the substitutability between foreign and domestic goods, the exchange rate effect with the foreseeable further depreciation of the euro capable of balancing at least in part the negative impact on exporters, the possible 'triangulations' of Italian companies that could increase production in third countries and the presumable favourable push deriving from the possible application of higher penalties to other countries, for example China. To all this must be added the possible reactions of the companies, which 'could,' says Panichi, 'take on the tariff increase and thus absorb the higher cost in order to maintain unchanged volumes and market positioning, or charge the tariff increase to customers'.
Geopolitical escalation and investment
.The other major 'external' variable to be deciphered concerns the geopolitical risk and in particular the conflict in Ukraine. According to S&P, its developments could weigh on Italian companies not so much on the side of the cost of raw materials, which they were able to cope with even at the most acute moment of the crisis, as on decisions regarding investments. In fact, the climate of uncertainty threatens to 'accelerate a phenomenon already underway that sees a moderation in their growth dynamics and lead to a levelling off in 2025'.
