Unveiling the Hidden Tariff Game: Trump's Negotiation Cycle and Trading Logic

President Trump recently announced tariffs on multiple EU countries, which on the surface appears to be a trade policy adjustment, but its subtle underlying intent points elsewhere — this is not about implementing tariffs for their own sake, but using them as bargaining chips. Behind this covert game involving the Greenland acquisition, there lies a carefully crafted market cycle operation. For market participants, understanding this logic hinges on grasping the true meaning behind the covert signals and the market volatility patterns they trigger.

The Covert Greenland Plan in Threats

The Trump administration announced a 10% tariff on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1. This list seems explicit, but its subtlety lies in the fact that — these tariffs will be increased to 25% on June 1, and will not be lifted until an agreement on the Greenland purchase is reached.

According to Trump, this deal must be a “complete and comprehensive purchase” of Greenland. The implicit message here is clear: tariffs are not the goal, but a pressure tool. Compared to last October’s threat to impose 100% tariffs on China to reduce rare earth export controls, the current threat involving Greenland is evidently a more complex and challenging objective. This suggests the entire game cycle could be extended further.

Cyclical Covert Strategies: From Signals to Panic

To understand the power of Trump’s tariff threats, one must recognize their covert cyclical pattern. This pattern has almost become the standard script for each round of trade conflicts over the past year.

First is the signaling phase. Trump often issues seemingly routine but actually threatening messages over weekends — the most covert timing — hinting at imminent tariffs on certain countries or industries. This subtle language immediately triggers market unease. For example, in this case, initial covert threats about Denmark on Friday caused markets to start declining.

Next is the escalation phase. Later on the weekend (or even on Saturday), Trump announces a new, substantial tariff plan, often exceeding 25%. At this point, the covert threat turns into explicit pressure, with force far beyond market expectations.

During Saturday and Sunday, the Trump administration repeatedly ratchets up tariff threats while markets are fully closed, maximizing psychological impact. This is the brilliance of the covert strategy — creating panic during market closures, giving investors two full days to digest the bad news, with actual price movements only occurring when futures open on Monday evening.

Targeted countries usually respond publicly during the weekend or send signals willing to negotiate. These signals set the stage for subsequent market rebounds.

When US Eastern Time hits 6 pm on Sunday (or in this case, Monday evening), markets react initially to these covert but powerful tariff news — emotional sell-offs. For example, during the October trade war with China, the S&P 500 futures once plunged by as much as -3.5%, reflecting market panic when covert threats turn into explicit pressure.

Market Rhythm of Covert Strategies

On Monday and Tuesday, the Trump administration continues to apply public pressure, but investors begin to realize a key fact: tariffs have not yet truly taken effect. There is a buffer of several weeks between the announcement date and the implementation date (this time, February 1). This realization marks the start of a mood relief.

By Wednesday of that week, bottom-fishers start entering the market. A relief rally begins, but this often fades and leads to another decline. However, savvy traders see this as an opportunity — buying at the emotional lows.

About a week later, that weekend, Trump posts that negotiations are ongoing, and he is working with leaders of the target countries to find solutions. This signal is also covert but points in the opposite direction — shifting from threats to easing, paving the way for a market rebound.

That weekend, at 6 pm on Sunday, as optimism returns, futures surge higher. However, gains often retreat after the cash market opens on Monday, reflecting that market participants still need to digest various pieces of information.

After Monday’s open, senior officials like Treasury Secretary Mnuchin appear on TV to reassure investors and emphasize progress in negotiations. The covert purpose of these actions is clear: steering market sentiment from panic to optimism.

Over the next 2 to 4 weeks, officials at all levels continue to leak progress on the trade deal. These signals, though covert, are unambiguous — an agreement is imminent. Eventually, the trade deal is officially announced, markets hit new highs, and then this cycle begins anew.

Precise Timing and Trading Opportunities

President Trump’s entire negotiation strategy revolves around timing and pressure. He deliberately provides a 2-3 week buffer before tariffs take effect, aiming to create a window for all parties to reach an agreement. Most importantly, Trump’s covert goal is never to let these tariffs actually come into force — he wants the deal.

This also explains why more and more announcements are made during market-closed weekends. He pushes threats to the edge but never crosses the line. If tariffs actually took effect and persisted, it would shake the global trade order — which is certainly not Trump’s goal.

The most telling detail from the previous US-China trade war is that on November 1, Trump announced a new trade agreement with China, exactly on the day when 100% tariffs were scheduled to take effect. The precision of this timing proves how meticulously the entire process was planned.

For investors who remain objective, understand this pattern, and adjust their trading strategies accordingly, the volatility during trade wars has become one of the best profit opportunities. Data from the investment analysis firm The Kobeissi Letter shows that traders employing this systematic approach significantly outperform market benchmarks.

Covert Goals and Deal Fulfillment

The Greenland acquisition involved in this tariff threat is indeed more complex than previous trade conflicts. Market turbulence may last longer, but the basic cycle sequence remains consistent; however, the implementation timeline will be extended.

The key insight is that these seemingly aggressive covert threats are actually a carefully designed negotiation tool. By creating tension during market closures, leaving buffers before tariffs take effect, and alternating between threats and conciliatory signals, the Trump administration continually pressures opponents to compromise.

For market participants, understanding this covert logic is valuable because: volatility equals opportunity. Those who can recognize cyclical patterns, operate contrarily during panic moments, and profit from optimistic signals are gaining the best returns in this process. The most astute market players have already fully exploited the covert volatility patterns of asset prices during trade wars, turning them into excess returns.