Italy’s Prime Minister Meloni will visit Washington on 17 April to talk about tariffs with President Trump.
The Italian government intends to allocate €14 billion from EU post-Covid funds to assist firms affected by US tariffs.
Moreover, an additional €11 billion in cohesion funds is planned to mitigate the impact of US tariff policy.
Trade Discussions
Meloni is scheduled to meet with the American president on April 17 for discussions focused on trade matters, particularly the recently imposed tariffs. These measures, introduced by Washington, have already started to affect a range of Italian exporters, particularly those in manufacturing and agriculture.
In anticipation of continued pressure on vulnerable industries, Italy’s government has outlined financial support using EU recovery resources. The plan earmarks €14 billion to help firms that have either been hit or may soon be, depending on ongoing negotiations and possible changes in policy from across the Atlantic. This amount will likely be targeted at medium-sized manufacturers and supply chain operations exposed to transatlantic trade.
On top of that, there’s another €11 billion set aside from the cohesion programme, typically used to reduce regional disparities. This time, though, it appears tailored to address the broader economic ripples caused by foreign policy shifts—especially those affecting logistics, warehousing, and secondary industries connected to exporting hubs in northern and central regions.
Impact on the Market
From our side, what’s interesting in this development is not merely the amount of support but also the type of funding used. Officials are pulling from pots usually aimed at structural change and long-term development, which tells us two things. First, they expect the problem to last more than a quarter or two. Second, there’s confidence that Brussels won’t oppose shifting these funds’ direction, at least not in the short-term.
Now, while those adjustments play out politically, it’s the forward curves and implied volatility that reflect how sentiment is moving. We’ve noticed a narrowing in the spread between near-dated and six-month options in sectors tied to EU-US trade—particularly machinery and luxury goods. That sort of flattening often doesn’t happen unless there’s a re-pricing of risk, usually due to policy clarity or renewed uncertainty. Given the timing of Meloni’s visit, this re-pricing likely aligns with expected headlines or a material shift in negotiation tones.
From a hedging point of view, it makes sense to reassess any current exposure linked to European exporters over the next fortnight. The implied move priced into options dated around the second half of April has begun to increase—not sharply, but steadily. This suggests that traders are starting to pre-position rather than wait for the bilateral meetings to wrap.
Strategically, we’ve seen a quiet build-up in open interest around mid-May expiries, especially within equity derivatives tracking Italy’s largest listed companies. The volume isn’t dramatic, but the placement implies cautious optimism or a preparedness to react quickly depending on the outcomes mid-month. This isn’t typical passive strategy rotation.
In short, with governmental financial backstops now defined, there’s a reduced chance of sustained downside beyond the next tranche of political news. But the timeline still matters—especially because the price action doesn’t yet suggest either relief or panic.
Everyone seems to be bracing for clearer signals from Washington.
