A Comprehensive Analysis of Trump's Tariff Tactics: A Practical Guide

Author: The Kobeissi Letter

Compiled by: Jesse

This is an in-depth analysis from The Kobeissi Letter regarding the Greenland tariff issue and Trump's "tariff strategy".

Is the trade war about to reignite due to Greenland's new tariffs?

Just now, President Trump announced new tariffs on the European Union and reaffirmed his primary strategic goal: the acquisition of Greenland. This includes new tariffs of 10% on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland, effective February 1.

Furthermore, these tariffs will increase to 25% on June 1 and will not be removed until a Greenland agreement is reached. According to Trump, the deal must be a "complete and full purchase" of Greenland.

Before analyzing our precise strategy, it must first be pointed out that the trade war has become a "cyclical headwind." Tariffs always return when the market is most unexpected, and then slowly dissipate. This is a product of President Trump's "tariff strategy," and it is meticulously designed.

A recent example occurred on October 10, when President Trump threatened to impose 100% tariffs on China starting November 1 (just 21 days after the announcement). This timing may sound familiar, as it's an integral part of this strategy manual. Following the announcement, S&P 500 futures extended their intraday losses to -3.5% before the weekend close.

October 10 - Trump threatens to impose 100% tariffs on China

President Trump consistently begins his negotiations with punitive and threatening messages, a tactic he employs effectively. His October standoff with China ultimately resulted in a new trade agreement and the lifting of rare earth export restrictions, which Trump had stated were harming the United States.

This time, the statement was released on Saturday, while market futures wouldn't open until Monday evening (because Monday is a federal holiday). The market reaction may be accompanied by a similar "emotional sell-off," but given the time available to digest the news, the impact is likely to be mild.

All of this is part of President Trump's "tariff strategy," which we will detail below:

Tariff Strategy Manual

In 2025, our investment strategy yielded nearly double the S&P 500, largely due to our early capitalization on asset price volatility during the trade war. Below are the specific strategies we have consistently employed:

A comprehensive step-by-step guide to dealing with Trump's trade war:

• Friday: President Trump released a cryptic message hinting at tariffs on specific countries or industries. Markets declined as uncertainty increased. This event began on Friday with Trump's threat to impose tariffs on Denmark.

• Later that day or shortly thereafter (this time it's Saturday): President Trump announces a massive new tariff, typically above 25%.

• Saturday and Sunday: President Trump repeatedly escalated tariff threats during the market closure to exert pressure and maximize the psychological impact.

• Over the weekend: Targeted countries typically respond publicly or signal a willingness to negotiate.

• At 6 p.m. Eastern Time on Sunday (Monday evening in this case): Futures markets opened, and the market reacted emotionally to the tariff headlines, with futures prices falling.

• Monday and Tuesday: President Trump continued to exert public pressure, but investors began to realize that the tariffs were not yet in effect and were still weeks away from implementation (such as February 1).

• Wednesday of the same week: Bargain hunters intervene and trigger a easing rally, but this momentum often fades and leads to another wave of decline. This is usually when "smart money" starts buying.

• The following weekend (about a week later): President Trump posted that negotiations were underway and that he was working with leaders of the target countries to find a solution.

• That Sunday evening at 6 p.m.: Futures opened sharply higher as optimism returned, but gains retreated after the spot market opened on Monday.

• After the market opened on Monday: Finance Minister Bessent and other senior government officials appeared on live television to reassure investors and emphasize progress on the agreement.

• Over the next 2-4 weeks: Officials at all levels of the Trump administration continue to provide updates on the progress of the trade agreement.

• Ultimately: The trade agreement was officially announced, and the market hit a record high.

• Loop: Repeat from step 1.

Of course, this is not a 100% guaranteed roadmap, but based on our experience, almost all trade wars since January 2025 have followed roughly the same path.

Note: This time, President Trump's plan to acquire Greenland is undoubtedly a higher demand than simply getting China to cut export controls. Therefore, the implementation of this strategy may be more protracted, but it will follow a similar sequence of events.

Timing is key

President Trump's entire negotiating strategy revolves around timing and pressure. He provides a 2-3 week buffer period before the tariffs take effect to allow for a deal. Trump's goal is to prevent these tariffs from ever actually taking effect; he wants a deal. This also explains why these announcements are increasingly appearing on weekends when markets are closed. He pushes the threats to the brink. That's why they work: if they do take effect and persist, they will have a market-shaking and world-changing impact.

In the previous round of the trade war with China, President Trump announced a new trade agreement with China on November 1—the very day the 100% tariffs were originally scheduled to take effect.

Ultimately, those who are able to remain objective and follow procedures during the volatility of the trade war are enjoying the best trading environment ever.

As mentioned earlier, this objective and systematic approach has enabled us to outperform market benchmarks. As shown in the chart below, since 2020, our investment strategy has returned nearly five times the S&P 500 index.

in conclusion

This time, President Trump's plan to acquire Greenland is indeed more demanding than ever before. Market volatility may persist longer, but we want to reiterate our original view: the best traders are profiting from asset price fluctuations triggered by trade war headlines.

Volatility presents opportunity.