So Trump wants to buy Greenland. Again. And the markets are having what can only be described as a full-blown panic attack about it. But before you start stress-eating and checking your 401k every five minutes, let’s talk about something called the TACO trade – and no, it’s not about your lunch plans.
TACO stands for “Trump Always Chickens Out,” which is basically Wall Street’s way of saying “this guy talks a big game but usually backs down when it’s time to actually do something crazy.” It’s like that friend who threatens to quit their job every Monday but is still there complaining about the coffee machine on Friday.
Here’s what’s happening: Trump just threatened eight European countries with tariffs starting at 10% in February, ramping up to 25% by June if Denmark doesn’t play ball on Greenland. The Dow dropped 870 points on Tuesday because apparently, investors forgot that Trump’s negotiation style is basically “threaten nuclear war, then settle for a slightly better parking spot.”
JPMorgan’s analysts are calling this classic “Art of the Deal” behavior – create maximum chaos, get everyone’s attention, then negotiate from there. It’s like starting a salary negotiation by asking for a million dollars and your boss’s car, knowing you’ll settle for a 3% raise and maybe better health insurance.
Scenario 1: Trump Actually Makes a Deal (55% chance)
The smart money says Trump and Denmark will work something out – maybe the US gets access to Greenland’s natural resources, or some kind of expanded military presence. This isn’t exactly shocking since Trump’s timing is suspiciously perfect with the World Economic Forum happening this week. Nothing says “pay attention to me” like threatening tariffs while all the world leaders are in the same room.
The idea of Denmark actually selling Greenland? About as likely as your ex texting you back. And military force? Even less likely, since attacking a NATO ally would be like punching yourself in the face while your friends watch.
Scenario 2: Trump Backs Down (40% chance)
Remember when Trump threatened Mexico and Canada with tariffs last year, then quietly walked it back? Yeah, that could happen again. Political pressure from midterm elections might make Trump realize that expensive groceries don’t win votes, even if you can blame it on Denmark.
Some analysts think we’ll see a “truce” where the US suspends tariffs while negotiations drag on forever – basically kicking the can down the road until everyone forgets what we were arguing about in the first place.
Scenario 3: The Supreme Court Says “Nope” (50% chance)
Here’s the wild card: the Supreme Court might just shut this whole thing down. There’s a decent chance they’ll rule Trump’s tariff powers are illegal, which would be like your mom taking away your credit card right before you buy something stupid.
The court is already side-eyeing Trump’s threats against NATO, and they’re not thrilled about being dragged into what one analyst called “lawless behavior.” Even conservative justices have limits, apparently.
The Bottom Line
Look, Trump’s Greenland obsession is real, but his methods are pure theater. The guy who wrote “The Art of the Deal” isn’t going to accidentally start World War III over an island most Americans couldn’t find on a map.
The TACO trade has worked before because Trump’s bark is usually worse than his bite. He creates chaos, gets headlines, then settles for something reasonable that he can spin as a win. It’s exhausting, but it’s also predictable.
So before you panic-sell everything and move your money into gold bars buried in your backyard, remember: this is probably just another Tuesday in Trump world. The markets will calm down, Denmark will make some face-saving concessions, and we’ll all move on to the next manufactured crisis.
Just maybe keep some antacids handy. This administration is going to be a wild ride.