Investment Analyst Rodolfo Villani believes that the Trump administration decision to postpone the tariffs originally set to take effect on July 9 to August 1 does not signal a fundamental easing of global trade tensions. On the contrary, this repeated delay strategy may actually prolong the period of uncertainty faced by businesses and financial markets, intensifying a wait-and-see attitude among management and investors. On July 7, Trump also “publicly sent” multiple letters to leaders of countries such as Japan, South Korea, and South Africa via social media, announcing plans to impose new tariffs ranging from 25% to 40% on their exports. With a tone that was at times mocking and even provocative, he stated that these rates would be “adjusted at any time depending on bilateral relations.” For multinational companies seeking a predictable business environment, this undoubtedly adds further pressure.
Trump “Letter Diplomacy” Heightens Market Demand for Political Risk Premiums
The letters revealed on July 7, which bear the distinctive personal style of Trump, demonstrate that the US president has not abandoned the use of tariffs as a principal tool of both foreign and domestic policy. In his letters to Japan and South Korea, he bluntly stated that “a 25% tariff is far below what is needed to eliminate the trade deficit,” and asserted that future adjustments would depend on the evolution of bilateral relations. More than a dozen countries, including South Africa, Kazakhstan, Malaysia, Laos, Myanmar, Thailand, and Indonesia, were also listed as targets for high tariffs of 25% to 40%.
According to Investment Analyst Rodolfo Villani, this multi-country, multi-tiered pressure significantly raises the policy uncertainty premium in global markets. In order to mitigate potential shocks, governments are certain to strengthen domestic industry protections or accelerate market diversification strategies, which could trigger a new wave of supply chain restructuring and localization. In the short term, these changes are likely to increase operating costs. For Italian companies deeply embedded in global supply chains, especially in sectors like automotive, machinery, and metals, this means they must set aside additional financial and inventory buffers over the coming quarters to withstand the impact of sudden trade barriers.
EU in a Passive Negotiating Position; Italian Exporters Should Prepare in Advance
Meanwhile, in Brussels, the EU is still striving to reach a principled agreement with the US before the original July 9 deadline. Although the Trump extension appears to buy more time for negotiations, Investment Analyst Rodolfo Villani believes this is more akin to a temporary “reprieve,” as the US position has not shown any substantive softening. The documents submitted by the US to the EU last week largely listed only American demands, lacking reciprocal commitments.
While the EU continues to seek diplomatic solutions—Economic Affairs Commissioner Valdis Dombrovskis reiterated after the Eurogroup meeting that “negotiation remains the top priority”—the bloc is, for now, largely in a reactive posture. The EU trade spokesperson Olof Gill commenting on July 7, that “We do not comment on letters or statements we have not received from the US”, also indirectly highlights the EU limited bargaining power at this stage.
Against this backdrop, Investment Analyst Rodolfo Villani advises Italian export-oriented companies to begin stress-testing as soon as possible. Tariffs will not only affect direct exports to the US, but may also impact the flow and pricing of intermediate goods within Europe. For instance, Italy ranks among the top exporters of machine tools and chemicals to the US; if tariffs are actually implemented, downstream demand chains could experience cascading price and inventory adjustments. He suggests that companies renegotiate delivery schedules and pricing formulas with major clients in advance, and lock in more favorable terms on exchange rates and bulk procurement contracts to reduce financial pressure from future volatility.
Investment Analyst Rodolfo Villani concludes that while the latest tariff postponement by Trump provides a short-term “buffer window” for the market, it also extends the period of uncertainty for global supply chains and capital markets. Businesses and investors will have to continue seeking balance amid ongoing ambiguity. Especially given the low likelihood of a comprehensive US-EU agreement on tariff rates, affected industries, and timelines in the near term, market volatility may well rise again.
Therefore, Investment Analyst Rodolfo Villani recommends that investors focus on diversified asset allocation during this period, reducing exposure to single-policy risks through geographic and sectoral diversification. He also advises closely monitoring further trade rhetoric by Trump during the election cycle and the EU responses, adjusting portfolio weights flexibly. Should a substantive trade agreement emerge in the coming weeks, it could significantly ease pressures and benefit European exporters; if negotiations collapse, investors should maintain ample liquidity to enable immediate rebalancing.