Your 5-step guide to the next Trump crisis

Trump's Greenland crisis came straight from the playbook he's used many times before. Let's demystify it.

Let’s learn from Greenland.

President Trump set the world atwitter for a few weeks by insisting that the United States would acquire the gigantic island of Greenland “the easy way” or “the hard way.” World leaders catastrophized as they envisioned the US military invading an allied territory and maybe launching a new war. Stocks tumbled on the prospects.

But never mind! On January 21, Trump said there was a “framework for a deal” that would give the United States “total access” to Greenland without any need for hostilities. Stocks rose anew. European leaders loudly exhaled and the NATO alliance, which Trump would have shattered by seizing Greenland, lived to see another day.

The whole drama comes straight from the Trump Crisis Playbook, which has guided Trump through his trade wars with dozens of nations and his failed effort to end Russia’s war in Ukraine. He’s applying it to the immigration crackdown in Minnesota and may roll it out for the upcoming midterm elections. Here are 5 key elements of a Trump crisis, so you recognize them the next time.

1. The pretext. First comes a rationalization for why the Trump crisis is necessary, often wrapped in grievance. It can be years in the making. Trump has been saying for a while that the United States needs Greenland, which is administered by Denmark, to counter Russian and Chinese national-security threats in the Arctic. He also wants valuable minerals Greenland may possess. And he recently suggested his hostility toward Greenland stemmed from the Nobel Committee’s refusal to award him their coveted Peace Prize (even though the Nobel Committee is based in Norway, not Denmark).

Denmark is a NATO member and longstanding US ally that has already granted the United States nearly free rein in Greenland. But Trump always has a pretext. He launched trade wars because other countries were “ripping us off” by selling more to us than we sell to them. He vilified undocumented migrants by saying they were “animals” mounting an “invasion.” When Trump repeatedly kvetches about some bugaboo, it’s a sign that could be his next crisis.

[What if the Nobel Committee just gave Trump a peace prize?]

2. The tantrum. In the space of barely two weeks, Trump escalated the Greenland situation from a puzzlement to a looming catastrophe, mostly through rhetoric and threats. He never sent warships or any other military force toward Greenland, but he implied he would, and then said he’d impose tariffs on eight European countries to force them to make a deal and hand Greenland over. Danish leaders flew to Washington on an emergency mission to talk Trump down, reporting gloomily that they had failed. Establishmentarians fretted about Trump losing his mind, which Trump must have loved. Once again, he had made himself the center of world attention and forced potentates into supplication before him.

3. The hunt for meaning. There are many players in every Trump drama, and the media has an important role, which is to try to make sense of it all. How does seizing Greenland fit into Trump’s new national-security strategy? What does Trump know about Greenland that the rest of us don’t? Could he finally be cracking up? With the media as an earnest and predictable foil, Trump stokes the frenzy even more, dominating the news and knocking nearly every other story out of the headlines.

The real meaning is usually a lot simpler than the experts and pundits pretend. Every Trump crisis is about Trump. His primary goal is always to amass more power, more leverage and more attention. There could be strategic afterthoughts, such as Trump’s new focus on dominating the Western Hemisphere. But even that is about Trump and the “Donroe Doctrine.” Whenever you want to know why Trump is doing something crazy, always start by asking what’s in it for Trump?

4. The precipice. This is the late stage of the standoff when the world is watching to see who blinks first. The best lesson for anybody battling Trump is that Trump will be the one to blink if his actions begin to affect US financial markets. This is the so-called TACO trade, Trump always chickens out. That’s what happened in the Greenland standoff. European nations didn’t give in to Trump’s tariff threats, and a weekend of bluster about war in the Arctic led to a stock-market selloff on January 20. The next day, during his big speech at the global gabfest in Davos, Switzerland, Trump caved and said he wouldn’t use military force against Greenland. Shortly after that came news of the “framework deal.” The crisis was over and stocks rallied.

[You’re only better off under Trump if you own stocks]

5. Trump declares victory. Trump never says he made a mistake or changed his mind and decided to back down. He always says he got exactly what he wanted, so whatever he threatened was ultimately unnecessary. On Greenland, Trump said his deal is “really fantastic for the USA, gets everything we wanted, including especially real national security and international security.” Okay! Nobody else involved in the deal is saying that, and there may not even be such a deal. But if Trump moves on, that’s deal enough.

There’s one important caveat in the Trump Crisis Playbook: Trump doesn’t always chicken out. TACO is really TDACO. He only chickens out when markets start to quake.

Trump eased up on radically high tariffs last April because stocks tanked for a week. But he has kept lesser tariffs in place even though they’re raising prices for American businesses and consumers and grinding job growth to a halt. The nonfarm payrolls report has nowhere near the influence over Trump that the Dow Jones has.

[Trump current presidency ranks 5th among the last 7 presidential terms. See why]

Trump assessed correctly that snatching Venezuelan President Nicolás Maduro would have no lasting market impact, so he approved the daring January 3 raid and shows no reluctance at all about running the country for years. No chickening out there. Trump also seems unfazed by the ugly behavior of immigration agents harming and killing Americans in their own cities. There’s no market downside.

That makes some Trump crises a lot more dangerous than others. Financial markets are the unstated king in Trump’s world, and if markets are displeased, Trump must atone. But if markets don’t care, that unleashes Trump. Navigate your crises accordingly.