Analyst: Market to Focus on "TACO Trade," Trump May Use Tariff Threats as Negotiation Tactic

Odaily News On January 19th, analysts stated that as U.S. President Trump is considering imposing tariffs on European countries regarding Greenland, increasing uncertainty in U.S. policy, the dollar faces new downward pressure. David Forrester, an analyst at Crédit Agricole, said: Trump's tariff threats have reignited the "sell America" sentiment. The market will also focus on the "TACO trade" (Trump Always Caves On), as Trump may use tariff threats as a negotiation strategy. This will provide some support for the dollar.

In 2026, with the intensification of geopolitical risks during President Trump's term, the euro will be one of the biggest losers. Tariffs could exacerbate the cyclical headwinds for the Eurozone economy and further weaken Europe's pressure on Russia over the Ukraine issue. (Jin10)