Italy’s government is considering plans to curb Chinese investors’ holdings at key companies to avoid tensions with the US at a time when tariffs and a strong euro are challenging Italian exporters.

Prime Minister Giorgia Meloni’s efforts would involve firms that are considered strategic, both privately held and state-controlled, Bloomberg News is reporting this week from Rome. Examples include tiremaker Pirelli, where China’s state-owned Sinochem International has a 37% holding.

Chinese diplomats have warned that trade relations may suffer if there is no consensual agreement on Pirelli, people with knowledge of those interactions said. China is one of Italy’s biggest trading partners.

Meanwhile, Washington has warned the company that its tires carrying cyber sensors could be restricted in the US, which is cracking down on software and hardware from Chinese-controlled companies in connected vehicles, fearing data harvesting.

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