On Iran, Trump executes his most spectacular U-turn yet

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WASHINGTON - International markets and the world at large have grown used to US President Donald Trump’s abrupt reversals, but the March 23 about-face on Iran was one of his most spectacular yet.

Since returning to power in 2025, he has openly embraced governing “by instinct”.

On the Middle East conflict, he has made a flurry of contradictory statements about goals and the timeline, and even declared on March 13 that the war would end when he “felt it in his bones”.

“Trump has been a master of sudden pivots and switches. So it’s sometimes hard to know if there is a strategy or if it’s just always improvisation,” said Dr Garret Martin, a professor of international relations at American University in Washington.

These reversals typically follow a pattern. The Republican President issues commercial, diplomatic or military threats – often accompanied by ultimatums – that stun the international community.

Then he abruptly reverses course. He claims to have secured decisive concessions that he rarely divulges and promises a resolution to the crisis, causing markets to swing dramatically.

On March 23, oil prices plunged and stocks surged after he announced on his Truth Social platform that the US had held talks with Iran about ending the conflict. North Sea Brent crude plummeted by more than 14 per cent while its American equivalent, West Texas Intermediate, lost nearly 10 per cent. The Dow Jones Industrial Average, meanwhile, jumped 700 points.

TACO

As recently as March 21, Mr Trump had given Iran 48 hours to reopen the Strait of Hormuz – a vital passage for oil shipments out of the Gulf – under threat of massive strikes against the country’s power plants. He did not mention dialogue.

But then on March 23, he declared a new deadline – five days this time – to allow time for the talks to continue.

He spoke of “very productive” discussions with “highly respected” and “very solid” Iranian officials, without identifying them.

But Iranian officials denied that any negotiations were taking place, which partially dampened market enthusiasm.

Mr Trump bragged about this negotiating skills in a speech in Memphis, Tennessee, on March 23, highlighting his business instincts rather than specific concessions from Tehran.

“My whole life has been a negotiation, but with Iran we’ve been negotiating for a long time,” he said. “And this time they mean business.”

The pattern is so familiar that it has its own acronym – TACO for Trump Always Chickens Out – coined by The Financial Times journalist Robert Armstrong in May 2025 after the US leader backed down on threats to impose global tariffs that caused market havoc.

Shaking up markets

The TACO term originally referred to a stock market strategy involving capitalising on a decline in assets – triggered by a bombastic announcement from Mr Trump – to buy low, in the hope of reselling at a profit once he inevitably changed his mind.

Other examples include Mr Trump backing down from threats on the US taking over Greenland, or those directed at Federal Reserve chairman Jerome Powell over US interest rates.

Quite often, while these U-turns shake up markets, they remain nebulous in terms of actual deals.

US partners and adversaries alike now know “there’s always an impermanence with everything with this administration; agreements and promises are only as good as the minute they’re made”, said Dr Martin.

In the case of Iran, Dr Martin suggests that Mr 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. AFP