The trade war is back. We spent 12 months analyzing EVERY tariff development, here's the exact tariff playbook you need. Before we begin, Bookmark this Article, it will be your guide to the next 2-4 weeks.
Moments ago, President Trump announced new tariffs on the EU and confirmed his top strategic priority: the acquisition of Greenland. This includes a new 10% tariff on Denmark, Norway, Sweden, France, Germany, the UK, Netherlands, and Finland beginning February 1st.
And, these tariffs will increase to 25% on June 1st and WILL NOT be lifted until a deal is reached on Greenland. This deal MUST be a "complete and total purchase of Greenland," according to Trump.
Before we break down our exact playbook, we must first note that the trade war has become an episodic headwind. Tariffs come back when markets least expect it and then they slowly fizzle away. This is a product of President Trump's "tariff playbook," it is by design.
The most recent episode was observed on October 10th, when President Trump threatened a 100% tariff on China, beginning November 1st, just 21 days out from the announcement. This timing may sound familiar, and that's because it's an integral part of the playbook. Immediately after, S&P 500 futures extended losses to -3.5% on the day before closing for the weekend.
President Trump ALWAYS leads with a punishing and threatening message, it's part of his negotiation tactic. And, it has worked for him. In the October bout with China, it ended with a new trade deal and China removing rare earth export restrictions which Trump said were harming the US.
This time around, the announcement has come on a Saturday and market futures will not be open until Monday night, as Monday is a Federal holiday. The market's reaction will likely come with a similar emotional selloff, but the impact may be less severe given there is time to digest the news.
This is ALL part of President Trump's tariff playbook, which we outline next.
The Tariff Playbook:
In 2025, our investment strategy nearly doubled the S&P 500's return, largely because we were early to capitalize on swings in asset prices during the trade war. Below, we outline the exact strategy we have utilized to do so:
A comprehensive step-by-step playbook to navigate Trump's trade war:
On Friday, President Trump posts a cryptic message signaling tariffs on a specific country or sector. Markets drift lower as uncertainty rises. This began on Friday when Trump threatened tariffs on Denmark
Later that same day, or shortly after (in this case on Saturday), President Trump announces a large new tariff, often 25%+
On Saturday and Sunday, President Trump repeatedly doubles down on the tariff threats to apply pressure while markets are closed, maximizing psychological impact
Over the weekend, the countries targeted by the new tariffs typically respond publicly or signal a willingness to negotiate
On Sunday evening at 6 PM ET, when futures reopen (in this case on Monday night), stock market futures drop in an initial emotional reaction to the tariff headlines
On Monday and Tuesday, President Trump continues applying pressure publicly, but investors begin to recognize that the tariffs are not yet live and are still scheduled to take effect weeks later, such as February 1st
By Wednesday of that same week, dip buyers step in and spark a relief rally, but this move often fades and leads to another push lower. This is typically where smart money begins buying
On the following weekend, roughly one week later, President Trump posts that discussions are underway and that he is working toward a solution with leaders of the countries targeted by the tariffs
On Sunday evening of that weekend at 6 PM ET, futures open sharply higher as optimism returns, but gains fade into the Monday cash market open
After the Monday open, senior administration officials such as Treasury Secretary Bessent, appear on live television to reassure investors and emphasize progress toward a deal
Over the next 2-4 weeks, various members of the Trump Administration continue to tease progress toward a trade agreement
A trade deal is announced and markets hit new record highs
Repeat from step #1
NOTE: This time around, President Trump's plan to acquire Greenland is certainly a bigger ask than China merely scaling back some export controls. Therefore, the playbook may be more drawn-out, but it will follow a similar sequence of events.
You MUST Watch The Bond Market:
The bond market is the ultimate indicator for a potential tariff "pause" as we saw in April 2025, just days after "Liberation Day."
As shown below, Heading into the April 9th tariff "pause," yields were rising sharply as the basis trade unwound. Hours later, Trump imposed the 90-day tariff pause as rates spiked. On April 10th, he admitted that he was "watching" the bond market.
Generally speaking, it seems like the 10Y Note Yield rising above 4.60% is President Trump "warning sign." If the 10Y Note Yield rises well above 4.50% this time around, we would expect President Trump to pull back significantly on tariff theats against the EU over Greenland until bond markets normalize.
Keep watching the bond market, President Trump does NOT want higher yields, especially during the midterm election year.
Timing Is Key:
President Trump's entire negotiation strategy is centered around timing and pressure. He provides 2-3 weeks of lead time before his tariffs go into effect to allow for a deal to be reached. Trump's goal is for these tariffs to NEVER actually go live, he wants a deal. It also explains why these announcements have increasingly come on the weekend, when markets are closed. And, he will push the threats to the edge. That's why they work; they are market-moving and world-changing, if they were to ever truly go into effect and stick.
During the last trade war bout with China, President Trump announced a new trade deal with China on November 1st, the exact day the 100% tariff was supposed to go live.
Ultimately, those who are able to remain objective and follow a process during the trade war bouts are realizing some of the best trading conditions ever.
As mentioned, this objective and systematic approach is what has led to our outperformance of market benchmarks. As shown below, our investment strategy has returned nearly five times the S&P 500 since 2020.
If you are interested in receiving our premium daily analysis, you may do so by joining our service here.
In Conclusion:
If you made it to the end, be sure to Bookmark this Article. It will come in handy multiple times this year.
This time around, President Trump's plan to acquire Greenland is certainly a bigger ask than China merely scaling back some export controls. Turbulence in markets may be longer-lived, but we emphasize our original point; the best traders are capitalizing on the moves in asset prices as a result of trade war headlines.
Volatility is opportunity.
Follow us @KobeissiLetter for real time analysis as this develops.
