MILAN, July 2 (Reuters) - Italy risks losing 20 billion

euros ($23.6 billion) in exports and 118,000 jobs next year if

the U.S. imposes tariffs of 10% on all European products, the

head of the main Italian business lobby said on Wednesday.

"Italy does not just export luxury products - with a demand

that isn't very sensitive to prices - but mainly machinery,

means of transport, and leather goods," Confindustria President

Emanuele Orsini told daily Il Corriere della Sera in an

interview.

Italian Prime Minister Giorgia Meloni recently downplayed

the potential impact of such a level of tariffs on Italian

companies, stating it would not be particularly harmful.

Orsini, however, warned that tariffs of 10% would be

unsustainable for the Italian economy.

He added that they would effectively translate into a 23.5%

duty as the impact of the dollar depreciation against the euro

since the election of U.S. President Donald Trump, amounting to

13.55%, needed to be taken into account too.

"A product that a year ago an Italian company was selling in

the United States for 100 now costs our American customer 123.

We fear very heavy setbacks," he added.

A deadline for countries to finalise trade agreements with

Washington is set to expire on July 9.

The European Commission, which coordinates EU trade policy,

accepts the U.S. baseline tariff of 10% as unavoidable but wants

immediate relief in key sectors as part of any agreement,

according to diplomats.

The euro has risen some 9% against the dollar since April as

investors, spooked by Trump's unpredictable economic policy,

warmed to the European Union's newfound military and industrial

ambitions.

($1 = 0.8493 euros)

(Reporting by Cristina Carlevaro, editing)