Italy’s Foreign Minister indicated that the EU may delay retaliatory tariffs against the US from April 15 to April 30.
As the deadline of April 9 approaches for the implementation of US tariffs, new developments regarding tariffs are expected.
Potential Impact of Tariff Changes
While eliminating tariffs entirely may be unrealistic, the US could reduce its tariffs to 10%, prompting a reciprocal decrease from the EU, which may positively affect global growth.
The statement from Italy’s Foreign Minister gives a small but meaningful hint that Brussels may push back its response to American trade penalties. Rather than acting almost in tandem with Washington’s schedule, the European bloc appears inclined to wait until the end of the month. This gives everyone just enough breathing room to watch the latest negotiation moves play out in full.
In the context of the upcoming American tariff deadline on April 9, there’s rising anticipation that some form of movement—be it a partial rollback or some other adjustment—may occur. Though the complete removal of duties isn’t on the table for now, the suggestion that Washington may bring its duties down to 10% opens up room for moderation on both sides.
What matters here is not simply whether those tariffs shift, but how they affect sentiment across broader risk markets. Lower rates on imports often carry through into pricing dynamics downstream, and can reduce input costs for a variety of goods. For us, that has a fairly direct impact on volatility modelling and short-dated contracts on indices and commodity-linked stocks.
Market Reactions and Strategies
If rates come down as described, volatility premiums would likely ease. That encourages short gamma strategies, particularly where dispersion is already compressing due to calmer macro drivers. Gamma scalping becomes more manageable amid tighter spreads, though caution is warranted if implied breaks from realised in mid-April, post-deadline.
From Monti’s remarks, it’s also fair to infer that in some corridors of Brussels, there’s appetite to appear measured rather than reactionary. Whether that’s a negotiation strategy or a sign of internal disagreement doesn’t change the fact that futures tied to European industrials and exporters could respond to headline-driven pricing shocks over the next fortnight.
What we’ve seen in the last two trade cycles is that the market tends to front-run optimism, especially when US trade authorities float softening measures. These patterns usually flatten risk-reversal skews and tighten calendar spreads in headline-sensitive sectors. Anyone allocating capital in those areas must factor in that policy direction might be hinted over weekends, which can create immediate Monday gaps on open.
Watch for the April 9 deadline, of course—but even more so for any statement from American negotiators in the days prior. Options tied to international logistics and consumer discretionary firms could be useful proxies for directional bias within the pricing of tariff changes. If spreads between affected verticals start expanding unusually, that’s a cue that direct equity exposure may become an inefficient vehicle, and switching to index-relative options might offer more clarity.
From here, we plan to monitor volumes in trade-sensitive skew pairs, especially where open interest is building beyond technical thresholds. Pricing anomalies—however brief—are likely to emerge during this adjustment period. Staying lean around political timelines will be more effective than adding static vega too far out.
Responses in the derivatives space will likely be asymmetrical. A softening of US measures might bring an outsized move compared to their earlier threat. Remain alert for that shaping, which would tilt the more favourable play toward options sellers, at least in the brief window following April 9.
