How to Deal with Trump? Accept this "Art of the Deal Playbook"

Original Title: "How to Deal with Trump? Accept This "Art of the Deal" Handbook"

Original Author: Zhao Ying, Wall Street News

Every Trump conflict follows the same script.

According to Xinhua News Agency, on the 9th local time, Trump talked about the war with Iran in Miami: He believed the war would end "soon," but "won't" end this week. This statement may sound ambiguous, but if you have been following his way of handling geopolitical conflicts, you will find this a familiar signal—a negotiation condition is quietly taking shape.

This is exactly the seventh step described in The Kobeissi Letter—an appearance of a conditional de-escalation signal. After the market has already seriously priced in "prolonged fighting," there is a conditional cooling-off rhetoric—an exploration of whether the opponent and the market can withstand the next escalation, not a retreat.

The U.S. independent macro market research newsletter The Kobeissi Letter systematically reviewed every geopolitical and trade conflict involving Trump since his inauguration in January 2025, from the trade war, Maduro's arrest in Venezuela, Greenland negotiation, to the current Iran conflict. The negotiation logic Trump has followed in handling these conflicts has been highly consistent.

This study has compiled a complete 10-step "conflict playbook" of how Trump handles conflicts: from verbal pressure, setting the stage, to preferring to make key moves on Friday nights, and then spreading risk premium across stocks, bonds, and commodities, ending with a "deal" triggering a sharp market repricing. In the next 2 to 4 weeks, the institution has provided three scenarios, with the outcome most likely still being a written agreement—but before that, the market may have to go through another round of pain.

Steps One to Three: From Verbal Pressure to "Friday Night Raid"

Trump's conflicts often do not start with the first missile or the first tariff, but with language pressure to "make the other party make a deal."

The Kobeissi Letter defines the starting point of Trump's conflict pattern as verbal pressure. In the case of the Iran conflict, the first strike on Iran's nuclear facilities occurred on February 28, but as early as two months ago, Trump had repeatedly posted on Truth Social saying, "A massive fleet is sailing toward Iran," and continuously urging Iran to "make a deal."

The institution points out that this pattern was also clearly visible in the Venezuela and EU tariff events: Trump announced the closure of Venezuelan airspace over a month before taking action against Venezuela; prior to imposing tariffs on the EU, he continued to threaten Denmark and claimed it was "time" to purchase Greenland.

The second step is a strategic posture and show of strength, including military deployments, public ally coordination, and other visible preparatory actions, with the aim of enhancing credibility without triggering full-scale conflict. The institution cites the example of Trump's meeting with Intel CEO Lip-Bu Tan in August 2025—prior to this, Trump publicly demanded his "immediate resignation," but later the two parties reached a government equity acquisition agreement of 10%, which resulted in over 80% paper profits in less than two months.

The third step is the iconic "Friday Night Event." The Kobeissi Letter found that Trump's major actions were highly concentrated on Friday nights into early Saturday mornings, including: a June 21 joint US-Israeli airstrike on Iranian nuclear facilities, a September 1 strike on Caribbean drug boats, a 100% tariff threat against China on October 10, the closure of Venezuelan airspace on November 29, a military operation in Nigeria on December 25, and an airstrike on Iran on February 28.

Why always act on Friday nights? The report suggests that if major news breaks during trading hours, liquidity instantly dries up, algorithmic programs amplify volatility, and intraday panic feeds on itself. Making announcements on Friday nights gives investors, institutions, and governments the entire weekend to digest the information.

More importantly, Trump is highly sensitive to severe market fluctuations—he needs a time window to observe market reactions and leave room for potential negotiations. Following this script, after acting on Friday nights, Trump often begins hinting at the possibility of a "deal" just before the opening of the futures market on the same week. This time with Iran, that signal did not come.

Steps Four to Six: How the Market Is "Educated"

After the third step, studies divide the market's typical reactions into three layers:

Step Four: Shock occurs, but the market initially bets on a "quick deal." The report describes a common path: intense volatility in Sunday night trading (6:00 pm ET) is followed by a "reverse correction" before the opening of the cash market on Monday as investors assume Trump loves to make deals and conflicts won't last long. The study uses the March 2 movement as an example: WTI crude oil initially retraced about 70% of its gains, the S&P 500 even turned green, but these movements were later reversed, with oil prices hitting new highs and the stock market hitting new lows.

Step Five: Trump used the rhetoric of "willing to fight forever" to reverse-pierce market optimism. After investors buy the dip, the market often faces a backlash. On March 2, Trump publicly stated that "the war can go on forever" and that the U.S. has "infinite high-end weaponry." The Kobeissi Letter believes that this "forever" statement is more of a negotiating tactic, showing a tolerable limit, but does not necessarily mean a desire for a prolonged war.

Step Six: The market officially begins pricing in "dragging it out." As of March 3, when this report was written, Brent crude oil prices rose above $85 per barrel for the first time in nearly two years; the Dow Jones Index fell by over 1100 points in a single day; the stock market hit a new weekly low, and defensive fund outflows accelerated. This stage marks a structural shift in market psychology—"the first dip was bought because investors expected an agreement to be reached; the second dip was bought because investors believed the escalation was temporary; it is only during the third dip that positions begin to undergo a structural change."

Steps Seven to Eight: Downgrade Signals and Market Feedback Loop

Step Seven is when conditional downgrade signals emerge, corresponding to Trump's latest statement on the 9th. The Kobeissi Letter emphasizes that the time window between Steps Six and Seven is "highly uncertain"—during the tariff war at the beginning of 2025, this transition lasted for several months, culminating in a rapid surge in U.S. bond yields just before the "pause" in tariffs on April 9.

The institution points out that historically, the catalysts that triggered Trump's backing down were either the target of the attack actively seeking to "reach an agreement" or a structural rupture in the market. In the case of Iran, this catalyst will either be the collapse of the Iranian government or some event that has a structural impact on the U.S. and global economy.

Step Eight is the feedback loop between the market and politics. The financial market has become a part of the negotiation environment itself, as oil prices, the stock market, and inflation expectations will in turn affect the political narrative.

Trump's three policy priorities: being a "peaceful president," controlling inflation, and lowering U.S. gasoline prices. From this, it can be deduced that if the oil price increase persists, it will directly conflict with his goals, especially in a critical midterm election year.

According to JPMorgan's estimate, a blockade of the Strait of Hormuz could push oil prices to $120 to $130 per barrel and lead to U.S. CPI inflation rising to around 5%. The institution has set three key monitoring thresholds based on this: Brent crude oil staying above $90 per barrel, the stock market falling 5% or more, and gasoline prices rising by more than 10%. "When these thresholds are reached, the probability of negotiation-related headlines appearing will significantly increase."

Steps Nine to Ten: Agreement Establishment and Violent Pricing

Step Nine is about agreement establishment and narrative framing. The Kobeissi Letter points out that every major confrontation within the Trump framework ultimately ended with a narrative of "maximum pressure in exchange for concessions," whether it was a trade agreement with China, the European Union, India, negotiations in the Intel and rare earth sectors, or multiple conflicts Trump facilitated the end of by 2025.

Regarding the Iran issue, the institution believes that if the Iranian government does not collapse, the final agreement may involve a ceasefire linked to the nuclear issue, a regional security arrangement with an enforcement mechanism, or a sanction adjustment plan conditioned on compliance benchmarks. "The importance of a specific framework is far less than timing and narrative framing."

Step Ten involves the violent repricing of the market and the declaration of a political victory. The Kobeissi Letter emphasizes that the market repricing after the agreement announcement is often sudden rather than gradual, as investors are generally in defensive positions at that time—having high energy exposure, compressed stock risks, and high volatility due to implicit uncertainty.

Once uncertainty suddenly dissipates, these positions will be quickly unwound. The institution cites historical cases in April, August, and October 2025 and January 2026 to point out that every time tariffs were temporarily suspended or a framework agreement was announced, the stock market surged significantly, while oil prices swiftly fell as the reopening of shipping lanes became anticipated.

Three Possible Paths in the Next 2–4 Weeks: "Negotiations Will Return to the Table"

The Kobeissi Letter has outlined three scenarios for the next two to four weeks.

Scenario One: Escalation briefly intensifies, oil prices rise, the stock market falls, then suddenly negotiation language emerges, leading to a rapid market reversal due to overly defensive positions.

Scenario Two: The conflict continues in a controlled but sustained manner, oil prices remain high but do not see a sharp surge, the stock market awaits clarification in high volatility, and the agreement is reached later this month under continued pressure.

Scenario Three: With a significant expansion of the conflict zone, including substantial disruption of shipping lanes or more direct involvement by a greater number of national actors, oil prices will move into the triple digits, and global risk assets will face a more profound repricing. Given historical precedents and the current context of a crucial midterm election year, the probability of the third scenario is low but not unthinkable.

Regardless of the path taken, the common bet this handbook makes is clear: Trump dislikes the "forever war" and excels at escalating to a point of sufficient leverage before framing the outcome as a "deal." The Kobeissi Letter concludes, "Remember, since Trump took office almost 13 months ago, every conflict he has engaged in has ended with an agreement. Trump is a dealmaker, follow the pattern, and you will be rewarded."

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