No. 1000 - Rerouting of Chinese products in response to US trade tariffs: evidence from Italian firms' expectations
The paper examines Italian firms' expectations concerning the potential rerouting of Chinese products to markets other than the United States following the introduction of US trade tariffs. Using data from Banca d'Italia's Survey of Inflation and Growth Expectations, the paper assesses the expected effects on competition, prices, investment and the overall macroeconomic outlook.
A significant share of firms - particularly in the manufacturing sector and among exporters - expects an increase in the supply of Chinese products in their reference markets. The main effect associated with this increase is a strengthening of competitive pressures, leading to downward pressures on selling prices and, to a lesser extent, on input costs. Firms more exposed to the rerouting of Chinese products report higher uncertainty, greater caution in investment decisions and more negative assessments of the macroeconomic environment, while inflation expectations appear only marginally affected overall.
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