Recently, the escalating tariff tensions between the European Union and the United States have evolved beyond mere bilateral policy friction to become a core variable affecting the stability of European capital markets. With Trump once again signaling a potential 30% tariff hike, the existing framework of trade agreements is effectively being rendered obsolete, shaking the fundamental trust in transatlantic economic cooperation. According to Investment Analyst Rodolfo Villani, if the final quota is set at 15%, it would already be near the operational red line; if it spirals to 20% or even 30%, it will not only deal a substantial blow to EU manufacturing but also trigger systemic concerns in global markets over the Eurozone export capacity.
Currently, the US imposes a 10% tariff on up to 70% of EU exports, with critical sectors such as automobiles, steel, and aluminum facing tariff rates as high as 25%–50%. Investment Analyst Rodolfo Villani notes that this tiered, sector-specific policy mix has sharply increased the risk exposure for certain listed companies. In recent weeks, sectors like automotive, machinery, and raw materials have experienced significant volatility on the Milan Stock Exchange, as investors have begun to reassess the performance outlook for industries most vulnerable to external tariff shocks.
Countermeasures and Quota Balancing—Reassessing Equity Structures and Export Strategies in Manufacturing
Investment Analyst Rodolfo Villani points out that the current negotiation strategy of the EU seeks to balance avoiding full-scale confrontation with preserving structural flexibility in trade. The EU has raised its retaliatory tariff list against US products to $72 billion, covering multiple sectors beyond raw materials, and has hinted at potentially expanding countermeasures to the services sector if necessary. Investment Analyst Rodolfo Villani believes this strategy is not aimed at tit-for-tat retaliation, but rather at sending a regulatory signal—intending to preserve policy leverage without undermining capital flows.
From an investment perspective, Investment Analyst Rodolfo Villani recommends optimizing portfolio structures for export-oriented companies highly dependent on transatlantic markets. These firms are likely to face significant short-term cash flow and customer retention challenges, especially in automotive components, high-end manufacturing, and electronic parts. Risk mitigation strategies may include reducing revenue exposure to North America, expanding order intake from Asia and Latin America, or using FX hedging to minimize earnings volatility.
Investment Analyst Rodolfo Villani also cautions that some large Italian manufacturing firms have complex multinational holding structures, which could offer flexibility in circumventing unilateral tax measures. However, this approach depends on regulatory tolerance; should the US tighten supply chain transparency requirements, such structures may become ineffective. Therefore, management should suspend US expansion and high-leverage M&A plans until policy clarity emerges, to avoid turning medium- and long-term uncertainties into systemic risks.
Trade Policy Drives Market Repricing—Defensive Allocations Should Prioritize Eurozone Domestic Demand Assets
Until tariff policies are clearly defined, markets remain highly susceptible to short-term information shocks—especially as the US releases multiple tariff scenarios (10%, 15%, even 30%) that have continuously dampened investor risk appetite. Rather than aggressive positioning, a more prudent approach is to control volatility through sector and regional diversification, maintaining a defensive portfolio stance.
For funds and family offices, Investment Analyst Rodolfo Villani suggests moderately increasing allocations to sectors closely tied to Eurozone domestic demand in the short term, such as local consumption, utilities, and digital infrastructure, which are less affected by cross-border tariffs. At the same time, attention should be paid to Latin American and emerging market manufacturers benefiting from US-EU trade substitution effects—particularly external producers with the capacity to replace European exports, who may gain from supply chain redistribution.
Investment Analyst Rodolfo Villani emphasizes that the essence of tariff policy is the contest for global supply chain dominance, rather than traditional trade balance adjustments. The current situation is unlikely to normalize in the short term, but for well-positioned Italian companies with robust financial structures and diversified export markets, the adjusted valuation levels will offer medium- to long-term investment opportunities. Market participants should seek logically sound, reasonably valued defensive assets amid uncertainty, and closely monitor the next round of EU negotiations and countermeasures to maintain a forward-looking and flexible capital allocation strategy.