Import-Export: the Fragile Balance of Global Flows in Q3 2025

2025 is proving to be a year of transition and rebalancing international trade. Following a positive growth phase among advanced economies during the first half of the year, the second half presents a more complex picture: global demand is slowing, the effects of US tariffs are beginning to impact European exports, and the industrial cycle continues to seek renewed momentum.

Against this backdrop, the September macroeconomic outlook published by Intesa Sanpaolo’s Research Department highlights a phase of stabilisation in import-export flows: Europe is holding firm, albeit without vigour—while Italy maintains modest growth thanks to more dynamic non-EU sectors and markets. 

The coming months will be decisive in assessing whether the trade agreement reached between the European Union and the United States at the end of July will succeed in restoring confidence and softening the impact of tariffs, or whether trade tensions will increasingly weigh on manufacturing activity.

This article analyses the main trends in trade flows during the third quarter of 2025, with a particular focus on the European economy, the impact of tariffs on Italian exports, and the emerging signs of industrial stabilisation in an otherwise uncertain global context.

THE EUROPEAN ECONOMY HOLDS STEADY, BUT TRADE SLOWS
 

After a better-than-expected first half of the year, euro area growth is starting to show signs of deceleration, weighed down by weakening global demand and a commercial environment burdened by US tariffs.

The Eurozone’s GDP is expected to grow by 1.2% in 2025, which is an upward revision due to solid performance in early 2025. However, expansion is set to slow in the latter half as exports begin to suffer from the global demand slowdown.

The trade agreement between the EU and the US, reached in late July, has helped reduce some of the uncertainty that had held back markets in previous months. The deal stabilised the average effective tariff on European exports to the US at around 14%, with an estimated direct impact on Eurozone GDP of -0.3% over a two-year horizon.

In the coming months, the effects of these tariffs are expected to become more visible in activity data, potentially leading to a contraction in trade volumes from the second half of the year. Domestic demand, supported by earlier interest rate cuts and fiscal expansion in Germany, may partially offset weaker exports, but a return to moderate growth is not expected before 2026.

GERMANY: INTERNAL REBALANCING AND THE IMPACT OF TARIFFS
 

Germany, the Eurozone’s largest economy and its industrial powerhouse, is still grappling with a weak phase. After a volatile first half, German GDP is forecast to grow by just 0.3% in 2025, with a rebound to 1% projected for 2026.

In Q3 2025, exports are expected to be increasingly affected by rising US tariffs, with an estimated average effective rate of 14%. This increase, coupled with a stronger euro and the sector’s structural challenges, is weighing on manufacturing exports, particularly in the automotive and mechanical engineering sectors.

However, stabilisation in domestic demand, supported by tax incentives in capital goods and infrastructure investment programmes, provides a source of support.

Confidence surveys point to gradually improving expectations in the manufacturing sector, suggesting the worst of the industrial crisis may be over. Investment in technology and defence, bolstered by new public measures, is helping lay the groundwork for a more robust recovery from 2026.

FRANCE: EXPORTS BOOSTED BY AEROSPACE AND SHIPBUILDING
 

France’s external trade performance differs from the rest of the Eurozone. Limited exposure to US tariffs (with an estimated impact of just -0.2% on GDP) enables the country to maintain a comparatively favourable position.

French GDP is expected to grow by 0.7% in 2025, buoyed by positive contributions from the aerospace and shipbuilding sectors, which are benefiting from Airbus deliveries and increased activity in shipyards.

However, domestic demand remains weak due to a more uncertain political climate and higher financing costs. Despite these factors, France continues to play a key role in sustaining European exports. It acts as a driver in high-tech and luxury goods sectors, areas where Italian and French companies maintain strong cooperation across continental value chains.

ITALY: WEAK GROWTH AND EXPORTS UNDER PRESSURE

Italy enters the second half of 2025 in a context of moderate growth and mounting external pressures. GDP is expected to rise by 0.5% in 2025 and 0.8% in 2026, marking a downward revision of two-tenths compared to previous forecasts.

Weak exports and sluggish consumption remain key drags. After a positive first quarter (+0.3% q/q), Q2 saw a contraction (-0.1% q/q), marking the first negative GDP print in two years.

Exports, which had surged earlier in the year due to advance shipments to the US ahead of the new tariffs, declined in spring (-1.7% q/q). The full impact of the US tariffs, now estimated at 13.8% on Italian goods (up from 2.5% pre-Trump), has yet to materialise fully, with peak effects expected between late 2025 and early 2026.

ITALY’S IMPORT-EXPORT FIGURES

In detail, August foreign trade data showed a decline in exports (-2.7% m/m), although imports fell even more sharply (-3.7% m/m). While exports to the EU rose (+2.1% m/m), this was insufficient to offset the steep drop in non-EU sales (-7.7% m/m).

Year-on-year, exports to the US dropped by -21.1%, reflecting a reversal of early-year frontloading ahead of the US tariff announcement.

Nonetheless, in the first eight months of 2025, exports were up 2.6% year-on-year, driven by:

• Pharmaceuticals (+34.8%);
• Transport equipment excluding motor vehicles (+12.1%);
• Basic metals (+4.8%);
• Agri-food (+4.8%).

In contrast, motor vehicles (-9.3%) and petroleum products (-15.6%) saw declines.

Italy’s trade surplus stood at €2.1 billion in August (up from €1.3 billion a year earlier), supported by lower energy prices, which helped reduce the energy deficit to -€3.4 billion from -€4.1 billion in August 2024.

Imports from the US continued to grow at a robust pace, +68.5% year-on-year, largely due to advanced pharmaceutical shipments linked to the ongoing tariff-related tensions between the EU and the US.

THE IMPACT OF US TARIFFS ON THE ITALIAN ECONOMY

The effects of US tariffs will be more pronounced between late 2025 and early 2026. Their overall impact is estimated at around -0.3% of GDP, spread over two years.

For Italy’s foreign trade, the net effect will be negative, though not dramatic. The contribution of net exports to GDP is expected to remain negative in both 2025 (-0.6%) and 2026 (-0.5%), with exports projected to rise slightly (+0.3%) and imports increasing more markedly (+2.6%).

At the sector level, manufacturing companies appear most exposed, while the pharmaceutical sector (partially exempt from tariffs) and agri-food show greater resilience, aided by geographical diversification and the high added value of Italian products.

 

ITALIAN INDUSTRY REMAINS FRAGILE

Following two months of growth, Italian industrial production fell more than expected in August, down -2.4% m/m and -2.7% y/y. Summer figures are typically volatile and may reflect seasonal or statistical anomalies, so this sharp drop should be interpreted cautiously and may be reversed in the coming months.

Nonetheless, the underlying strength of the Italian industry remains fragile. Confidence surveys suggest the sector’s low point may be behind us, but a clear turnaround has yet to emerge. Moreover, the full impact of US tariffs likely has not yet filtered through and may become more apparent in the months ahead.

ASIA AND EMERGING MARKETS: CHINA HOLDS UP, INDIA SLOWS

Across Asia, the outlook remains mixed. China is outperforming expectations with an estimated growth of +4.8% in 2025, despite US tariffs and the property crisis. Growth is being driven by digital and financial services and a recovery in non-US-bound exports (+11.7% y/y in July–August).

Still, signs of slowdown are emerging: domestic consumption and investment lost momentum over the summer, and the effects of reciprocal tariffs, only temporarily suspended, could become more evident in the coming months.

India presents a different picture, where growth is at risk due to new US tariffs of 25% on imports, doubled to 50% for Russian-origin petroleum products. According to Indian government estimates, this could shave 0.5–0.6 percentage points off GDP growth in the current fiscal year.

OUTLOOK: CAUTION AND ADAPTABILITY REMAIN KEY
 

Q3 2025 paints a picture of global trade in a phase of adjustment. While moderate, tariffs continue to weigh on the recovery, and domestic demand in Europe remains in consolidation.

For Italy, the growth path remains fragile but not derailed. Industrial recovery and export diversification are two levers that could cushion the impact of trade tensions.

In the coming months, Italian firms will need to strengthen their competitiveness through:

• More efficient management of import-export flows;
• Currency risk hedging strategies;
• Investment in innovation and digitalisation.

In recent years, Italy’s productive system has shown remarkable adaptability to external shocks. Even in a context of tariffs, volatility, and weak global demand, the strategy for the future remains unchanged: focus on quality, diversification, and the distinctive value of Made in Italy brand in international markets. 

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