WASHINGTON: International markets and the world at large have grown accustomed to U.S. President Donald Trump’s abrupt about-faces, but Monday’s about-face on Iran was one of the most dramatic yet.
Since returning to power last year, Trump has openly embraced government “by instinct.”
On the Middle East conflict, he has made a series of contradictory statements about goals and timelines, even declaring on March 13 that the war would end when he “felt it in his bones.”
“Trump has been a master of sudden twists and turns. So sometimes it’s hard to know if there’s a strategy or if it’s always improvisation,” said Garret Martin, a professor of international relations at American University in Washington.
These changes usually follow a pattern. The Republican president launches commercial, diplomatic or military threats, often accompanied by ultimatums, that stun the international community.
Then he abruptly changes course. He claims to have won decisive concessions that he rarely discloses and promises a resolution to the crisis, causing markets to swing dramatically.
On Monday, oil prices plunged and stocks rose after Trump announced on his Truth Social platform that the United States had held talks with Iran to end the conflict. North Sea Brent crude plummeted more than 14 percent, while its U.S. equivalent, West Texas Intermediate, lost nearly 10 percent. Meanwhile, the Dow Jones Industrial Average jumped 700 points.
tacos
As recently as Saturday, Trump had given Iran 48 hours to reopen the Strait of Hormuz – a vital passage for oil shipments from the Gulf – under threat of massive attacks on the country’s power plants. He didn’t mention the dialogue.
But then, on Monday, he declared a new deadline – five days this time – to allow time for talks to continue.
He spoke of “very productive” conversations with “very respected” and “very solid” Iranian officials, without identifying them.
But Iranian officials denied that negotiations were taking place, partially dampening market enthusiasm.
Trump boasted about his negotiating skills in a speech Monday in Memphis, Tennessee, highlighting his business instincts rather than specific concessions from Tehran.
“My whole life has been a negotiation, but with Iran we have been negotiating for a long time,” he said. “And this time they are serious.”
The pattern is so familiar that it has its own acronym, “TACO,” which stands for “Trump Always Chickens Out,” coined by Financial Times journalist Robert Armstrong in May 2025, after Trump walked back his threats to impose global tariffs that wreaked havoc on the market.
Shaking up the markets
The term TACO originally referred to a stock market strategy that involved capitalizing on a drop in assets—triggered by a bombastic Trump announcement—to buy low, hoping to resell at a profit once he inevitably changed his mind.
Other examples include Trump retracting his threats to have the US seize Greenland, or those directed at Federal Reserve Chairman Jerome Powell over US interest rates.
Very often, while these U-turns shake up markets, they remain nebulous in terms of actual deals.
America’s partners and adversaries alike now know that “there is always an impermanence to everything in this administration; deals and promises are only as good as the time they are made,” Martin said.
In the case of Iran, Martin suggests that Trump backed down due to three factors: market jitters, potential pressure from Gulf nations, and the emergence of “tensions” within his own Make America Great Again, or MAGA, political movement over the conflict.
