A gambling table with no way out: The end of the TACO deal.

Author: Aelia Capitolina; Source: X,@Areskapitalon

From tariffs to Greenland to Venezuela, every adventure by Trump has ended in retreat, and every retreat has been packaged as a victory. The market has learned this rhythm and even invented a trading strategy to bet on it. Then he attacked Iran. This time, the price of retreat is the end of the American order.

To understand the predicament of March 2026, we need to go back ten years.

In 2016, Trump was elected President of the United States.

The force that propelled his victory came from a class marginalized by the financial order for thirty years: Rust Belt manufacturing workers, middle-class workers outsourced to other jobs, families who lost their homes in the 2008 crisis, and small-town residents increasingly silenced by the prosperity of coastal cities. Their anger wasn't abstract political discontent; it was concrete, day-to-day despair accumulated as they watched gas prices at the gas station, food prices at the supermarket, and their bank statements at the end of the month. The establishment of both parties had ignored them for decades because they weren't on the Davos agenda, in the Silicon Valley spotlight, or in the research topics of Washington think tanks. Trump himself didn't share interests with these people, but rather anger towards the same "center." He was a marginalized member of high society, wealthy but despised and ridiculed by that class. His voters were marginalized members of the economic system, with votes but treated as if they didn't exist. These two resentments of exclusion resonated. "America First" literally means: spend resources on ourselves, not on overseas military adventures and the games of the Washington elite. Then he walked into the White House and ran into resistance from the system itself. His first four years were a history of being bound by the system. Trump clashed with the establishment from his very first week. The January 27, 2017 travel ban on Muslims was repeatedly blocked by the courts. The FBI's investigation into "Russiagate" then lasted for more than two years, FBI Director Comey was fired, and Special Counsel Mueller was appointed. In 2019, he was impeached by the House of Representatives for abuse of power and obstruction of Congress over the Ukraine phone call scandal, and in February 2020, he was acquitted by the Senate in a nearly partisan vote. Two days after the impeachment proceedings ended, he fired two officials who had testified in the impeachment inquiry. In April 2020, he also fired Michael Atkinson, the intelligence community inspector general who was responsible for forwarding whistleblower complaints to Congress. In Trump's view, the lessons of the past four years were clear: his failures were all caused by the "deep state." He didn't trust CIA intelligence briefings because the CIA was "that guy's" territory. He ignored the advice of State Department experts because the State Department was a "swamp." Generals told him the Iran issue was complex and required patience, which he interpreted as "they don't want me to win." Mattis resigned, Bolton was ousted, and Tillerson was denounced as "stupid as a rock." One by one, knowledgeable people left or were purged, but the inertia of the system itself and the flexibility of the institutions repeatedly blocked him. The wall he wanted wasn't fully built, the trade war with China ended with a watered-down "phase one agreement" (China's promised $200 billion in additional purchases ultimately amounted to less than 58%), his "fire and fury" against North Korea turned into a photo opportunity with Kim Jong-un, and the withdrawal agreement in Afghanistan gave the Taliban almost everything it wanted without any meaningful concessions in return. In 2020, he lost re-election. In his narrative, this was the establishment's final betrayal of him. Then, on July 13, 2024, at a campaign rally in Butler, Pennsylvania, a bullet grazed his right ear. A few millimeters of deviation was the difference between life and death. His face covered in blood, he was tackled to the ground by the Secret Service, then stood up, raised his fist, and shouted "Fight! Fight! Fight!" to the crowd. This photo became the most powerful image of the 2024 election. He wrote on Truth Social, "It was God alone who stopped the unthinkable from happening." His supporters interpreted this as a divine mandate: God spared him to save America. His son, Eric, called it "divine intervention." Tucker Carlson openly discussed "divine will" at the Republican National Convention. In the final months of the 2024 campaign, those around Trump said he genuinely believed he had been chosen by God to fulfill some kind of mission. In January 2025, he returned to the White House with this sense of destiny. This time, he would not repeat the mistakes of his first term. This time, he would completely drain the "swamp." The personnel arrangements for his second term reflected this determination. Hegseth, a Fox News weekend host, became Secretary of Defense. Rubio became Secretary of State, his diplomatic vision centered on the Western Hemisphere and Israel. Career diplomats and intelligence analysts with Middle Eastern expertise were systematically marginalized. The entire decision-making body was reorganized based on loyalty rather than professional competence. Trump blamed all his failures in his first term on obstruction from establishment experts, so the logic for his second term was simple: replace them all with "his own people." Then he began to deliver on his promises. Or rather, attempted to deliver. Tariffs were his core economic policy tool. The "Liberation Day tariffs" announced in April 2025 imposed high tariffs on almost all countries globally, aiming to bring manufacturing back to the US and protect domestic jobs. Markets crashed. A week later, he suspended most of the tariffs. Tariffs on China were reduced from 145% to 30% and suspended for 90 days. The 25% tariffs on Canada and Mexico were largely exempted. He threatened to fire Federal Reserve Chairman Powell, then rescind the decision. The 50% tariffs on the EU were repeatedly postponed. On May 2, 2025, Financial Times reporter Robert Armstrong coined an acronym: TACO. Trump Always Chickens Out. Traders discovered a repeatable pattern: Trump announces extreme policies, the market panics and falls, then he backs down, and the market rebounds. If you buy during the panic and sell during the retreat, you can make money every time. Treasury Secretary Bessant became a key figure in this rhythm: whenever panic intensified, he appeared on CNBC, suggesting in a professional and reassuring tone that "negotiations are making constructive progress." By the end of 2025, TACO had become a trading strategy, a precise summary of the president's behavior. The S&P 500 rose to all-time highs in this rhythm. But each cycle of TACO exposes, and only exposes, the same fact: the marginalized dissatisfaction with the establishment, represented by Trump, cannot shake the system. Each time he launches an attack, the system's resilience bounces him back. Tariffs hurt American consumers, forcing him to back down. Threatening allies, they retaliate in unison, forcing him to back down again. Threatening to fire Powell, the dual pressures of law and the market force him to relinquish it. He has acquired the greatest power in the world, but this power has repeatedly proven limited in the face of collective resistance from those within the system. Greenland is the most absurd example. In January 2026, he demanded "complete and total control" of Greenland, threatened tariffs on Denmark and seven European allies, refused to rule out the use of force, and even stated in a letter to the Norwegian Prime Minister that because he did not receive the Nobel Peace Prize, he no longer felt obligated to "purely think for peace." The market crashed, and the EU suspended the trade agreement. Then he flew to Davos, announced a "framework agreement," and withdrew everything. NATO Secretary General Rutte later said that the talks didn't even discuss Denmark's sovereignty over Greenland. The market rebounded, with the Dow Jones Industrial Average surging nearly 600 points. Davos executives texted each other: "Taco!" He didn't deliver on any of the economic promises he made to voters. Tax cuts benefited businesses and the wealthy. Tariffs didn't bring manufacturing back; instead, they drove up the prices of imported goods. Real wage growth was limited. His voter base—Rust Belt workers, truck drivers, and small business owners—didn't improve their lives. A leader entrusted by voters with the mission of breaking the system was bounced back by the system every time he threw a punch. He needed a new way to prove he wasn't Taco, to offer voters something alternative in terms of economic benefits. If he couldn't make them richer, at least he could make them proud. If promises cannot be kept, at least show strength. In January 2026, Venezuela gave him his chance. In the early hours of January 3rd, US special forces raided Caracas, arresting President Maduro and his wife. The operation, codenamed "Operation Absolute Resolve," involved over 150 aircraft, months of CIA infiltration, and repeated drills by Delta Force on a replica of Maduro's hideout. Trump posted a photo on Truth social media of Maduro blindfolded and wearing noise-canceling headphones sitting on a warship. Venezuela was too weak. Maduro's army offered virtually no resistance to the US military, and the entire operation was completed overnight. There were no US casualties, and international condemnation remained merely verbal. At his Mar-a-Lago estate, Trump declared that the US would "manage the country," that oil companies would invest billions, and that "we won't spend a penny of our money." Hegseth declared from the sidelines that this was "America First, peace through strength." Republican lawmakers announced Cuba and Nicaragua as the next targets that day. Venezuela provided Trump with a dangerous lesson: military adventurism can be as efficient, controllable, and profitable as a business transaction. More importantly, it gave him a new path to bypass systemic resistance. Tariffs and diplomatic maneuvering within the system are always bounced back by the system itself. But military force acts directly on weaker adversaries outside the system, without the filtering of congressional debate, court scrutiny, ally coordination, or market feedback. Maduro's photo became evidence that he was no longer a TACO (Taboo Act). This confidence led directly to Iran. Before Venezuela, Trump's policy toward Iran followed the standard TACO model. After massive protests erupted in Iran in January 2026, he threatened military intervention but took no action. He conducted nuclear negotiations with Iran through the Oman channel, and the negotiations even came close to a breakthrough in late February. Then, in the early hours of February 28th, the joint US-Israeli airstrikes began. Israel had been pushing for an attack on Iran. The success in Venezuela gave Trump confidence. His decision-making team lacked the professional background to understand the complexities of Iran. Those who understood Iran—CIA analysts, State Department Middle East experts, retired generals—were either purged during his first term or marginalized to the point of being ignored during his second. Jeremy Shapiro, a researcher at a European foreign policy think tank, once calculated that of Trump's 22 foreign military threats by early 2025, only two actually resulted in action. TACO's statistical pattern is so overwhelming that even days before the airstrikes, when US troops were massively assembling in the Middle East, many analysts were still saying, "He's just putting pressure on us; he'll eventually return to the negotiating table." What they didn't know was that this time, Trump faced an opponent fundamentally different from all his previous adversaries. Previous attacks were all directed inward: putting pressure on participants within the system. Tariffs impacted China, but China was within the system, with interests maintaining its operation, allowing both sides to find a middle ground. Greenland impacted Denmark and NATO, but they were also within the system, and the conflict remained at the verbal level. Venezuela was too weak, and the conflict was resolved overnight. Each Taco crackdown was predicated on the opponent being either within the system or too weak, with manageable costs for retreat. This time, Trump, with the entire military force of the system, is crashing into something outside the system. The Islamic Revolutionary Guard Corps has been excluded from the US-led international order for forty years. It has no SWIFT access, no assets in any Western country, and no interests dependent on any compliant trade channels. Its smuggling network, shadow fleet, and underground financial system grew out of this exclusionary environment. Each escalation of sanctions inadvertently strengthens the IRGC's relative power, as sanctions block the channels of the compliant economy, while the IRGC controls the informal channels. By 2026, the IRGC will control approximately 50% of Iran's oil exports, operate nearly 500 shadow fleet vessels, and possess a complete parallel economic system encompassing banks, ports, construction, and smuggling. This organization benefits from the collapse of the global order. Its interest function is completely opposite to that of the United States. There is no middle ground acceptable to either side. Khamenei is the only one capable of acting as a translator between the IRGC and the international order. He spent thirty-six years building a network of personal loyalty within the IRGC, able to switch between revolutionary fervor and national rationality. He did not blockade Hormuz during the Iran-Iraq War, and he ratified the nuclear agreement in 2015. Each time, he suppressed more radical voices within the IRGC. The airstrike on February 28 killed him. Trump thought he was creating a larger version of Venezuela: a decapitation strike, eliminating the leadership, regime collapse, and a declaration of victory. What he didn't understand was that killing Khamenei wasn't just removing the enemy's head, but freeing the enemy from the only remaining chain. The man who succeeded Khamenei in command of the IRGC was Ahmad Vahidi, originally named Ahmad Shah Cheraghi, born in Shiraz in 1958. He had no prominent clergy family background and no overseas education. At 21 when the revolution broke out in 1979, he immediately joined the IRGC. Two years later, at 23, he became the second-in-command of the IRGC's intelligence system. In 1988, at 30, Vahidi became the first commander of the Quds Force, leading all of the IRGC's overseas operations for nine years. The foundation of the proxy empire Soleimani later established in the Middle East was laid by Vahidi. In 1994, the AMIA Jewish community center in Buenos Aires was bombed, killing 85 people and injuring more than 330. This was the deadliest terrorist attack against Jewish targets outside of Israel since World War II. Argentine prosecutors concluded that the attack was "approved by consensus at the highest levels of the Iranian government." Vahidi, then commander of the Quds Force, was placed on Interpol's red notice. US intelligence officials also revealed that he met multiple times in Sudan with Ayman al-Zawahiri, al-Qaeda's second-in-command. Instead of being punished, he rose through the ranks, serving as Minister of Defense, Minister of the Interior (during which time, in charge of domestic security, he was found by the US Treasury Department to have "ordered or controlled serious human rights violations against Iranian citizens"), until he assumed command of the IRGC on March 1, 2026. His entire adult life has been within the IRGC from day one. Upon being appointed Deputy Commander-in-Chief of the IRGC, he stated, "Defending the Islamic Revolution is the greatest virtue in the world, and opposing the Islamic regime is the greatest evil." For Vahidi, the interests of the revolution were paramount. Iran was merely a tool to achieve the revolution's goals. Economic collapse? The revolution didn't need GDP. Cities bombed? A purer revolutionary society could be rebuilt from the ruins. People suffering? Suffering was fertilizer for the revolution. He wouldn't stop, not because the cost of stopping was too high, but because in his value system, stopping itself was the ultimate evil. Projecting the expectation that "the opponent will rationally calculate and then stop" onto this man is as absurd as projecting the same expectation onto Bin Laden. Ten days after the airstrikes, Iran's power structure underwent a historic shift. The constitutionally mandated three-person interim council nominally inherited the Supreme Leader's powers. Ali Larijani, addressing the nation on television as secretary of the Supreme National Security Council, was dubbed the "shadow emperor" by some Western media outlets. However, just hours after Pezehiziyan's March 7 "apology" that attacks on Gulf states would cease, the IRGC's official Telegram channel publicly refuted him, its tone like a teacher correcting a student's mistake: "The president made a mistake, and the armed forces have proven that statement wrong in action. Our mission is war and defeating the enemy." It then boasted of the attack's effects: shops in Dubai and Abu Dhabi were emptied, even bottled water was unavailable. The interim council and Larijani speak the language of the international system and can communicate secretly through Omani channels. But they lack military command. Those who can speak have no power, and those with power don't care what they say. Meanwhile, an expert committee of 88 clerics conducted the Supreme Leader election under immense pressure from the IRGC. In the first round of online voting, opponents were "limited speaking time," and voting proceeded directly after discussions were interrupted. Eight members announced a boycott due to "repeated contact and psychopolitical pressure from the IRGC." On March 8, several committee members announced a "majority consensus" but did not reveal the names. One said the candidate was chosen based on Khamenei's dying words: the Supreme Leader should be "hated by the enemy." "Even the Great Satan mentioned his name." Trump publicly stated that Mujtaba was "unacceptable," and by this logic, "opposition from the enemy" became the best credential for a candidate. By evening, Mujtaba was confirmed as the Supreme Leader of the Islamic Republic. Mujtaba had never held a government position, lacked an independent political base, and all his power stemmed from the IRGC's selection of him. He is the figurehead; Vahidi holds the real power. The statement, "The name of the Supreme Leader will still be Khamenei," proclaims a shift from clerical rule to military dictatorship. The remnants of Iran are meant to serve the Islamic Revolution. And the Islamic Revolution now controls the Strait of Hormuz. The Strait of Hormuz, 33 kilometers wide, carries 20% of the world's oil trade. The insurance market collapsed within 72 hours. Traffic plummeted from 138 vessels per day to near zero. This is the first time Trump has encountered an opponent he cannot TACO. The IRGC needs nothing from the US. The more the US attacks, the higher oil prices rise, the greater the IRGC's profit per barrel exported through its shadow fleet, the more desperate countries will bypass sanctions to buy oil from it, and the more normalized its status becomes. The US and Israel bombing Iran's energy facilities destroys the legitimate infrastructure serving ordinary people; the IRGC's exports are channeled through another shadow system scattered along its 2,500-kilometer coastline. Each round of bombing simultaneously drives up global oil prices, strengthens the IRGC's domestic monopoly, and destroys legitimate economies that compete with the IRGC. Every action by the US and Israel weakens certain capabilities of the IRGC in the short term while strengthening its strategic position in the medium term. If Trump backs down, the consequences will be vastly different from previous TACOs. The IRGC is the central hub of the entire anti-American "resistance axis." Hezbollah's funding and weapons come from it, the Houthi drone technology comes from it, and Iraqi Shiite militias are coordinated by it. Retreating to the IRGC means retreating from the entire anti-American axis. Vahidi will become an object of admiration for global anti-American forces. A man wanted by Interpol, a man who shook hands with Ayman al-Zawahiri of al-Qaeda, has caused the world's most powerful military machine to back down. This narrative, reaching the ears of every organization wielding asymmetric leverage, means: you don't need nuclear weapons, you don't need a regular army; you just need to control a key physical chokepoint and be less afraid of pain than your adversary. The United States will back down. The underlying code of the global security order since 1945 has been: American military power guarantees the continuous provision of global public goods; in exchange, global trade is denominated in dollars, and American security commitments are considered credible. If the IRGC proves this underlying code wrong, the Panama Canal, the Strait of Malacca, the Suez Canal, submarine cables, critical mineral supply chains—every chokepoint in the world that can be held by asymmetric power—will be reassessed. Every American security commitment to Taiwan, the Baltic Sea, and the South China Sea will be questioned. The cost of retreat is the collapse of the deterrent foundation of the post-war global order. In a sense, calling it World War III is not an exaggeration if you define a world war by its structure rather than its scale. The defining characteristic of the first two world wars was not the number of deaths, but the shattering and rebuilding of the foundations of the global order. What is happening in 2026 is the immediate falsification of the core assumptions of the order established since 1945. Therefore, Trump is locked in. If the fighting continues, oil prices will continue to rise, his voters will be crushed at gas stations (the average price of gasoline across the US rose from less than $3 to $3.41 in a week and is still rising rapidly), the economy will slide into stagflation, and his boast in the State of the Union address that "gasoline is only $1.85 in some places" will become a historical joke. Stopping would have made Vahidi a symbol of global anti-American forces, the IRGC a permanent tollbooth at the Strait of Hormuz, the collapse of the sanctions system, and the discrediting of the global security order. Both paths lead to disaster, the only difference being the form of the disaster. Bessant plays an impossible role in this predicament. In the first week of the war, he announced a series of fire-fighting measures: the DFC would provide insurance for oil tankers (facing a $352 billion insurance shortfall), grant India a 30-day exemption from purchasing Russian oil, hinting at a possible "unsanction" of more Russian oil. Each measure exposed the contradictions in his policy: bombing Iran to demand regime change while simultaneously lifting sanctions on Russia to fill the supply gap he himself had created. But he could not recommend a ceasefire because the consequences of a ceasefire were beyond the scope of the Treasury Secretary's responsibilities. He could not be held responsible for the potential security crisis in Israel that could result from the US withdrawal from the Middle East. He could not resign because resignation would be interpreted as a signal. He could only repeat on television what he himself didn't believe, fueled by his professional credibility. The war wasn't his suggestion, and he couldn't be held responsible for a ceasefire. A report from the National Intelligence Council stated that a large-scale strike was "unlikely" to overthrow the Iranian regime. This report was almost certainly submitted to the decision-making level before the war. It was ignored because it came from the "deep state." During his first term, Trump blamed all the failures on establishment experts. In his second term, he purged them all. Then he faced a crisis that truly required professional judgment, and no one around him could tell him: if you kill Khamenei, the IRGC will lose its grip, the Strait of Hormuz will be blocked, the insurance market will collapse, oil prices will skyrocket, and your voters will be crushed by gasoline prices. The expertise needed to understand these causal chains resided in institutions he considered enemies. From the anger of Rust Belt workers to the ruins of Tehran to the blockade of the Strait of Hormuz, it's a complete chain of cause and effect. Marginalized voters elected a leader. This leader, bound by the system during his first term, accumulated deep resentment. After surviving an assassination attempt, he became convinced he was destined for greatness. In his second term, he purged professionals within the system, attempting to deliver on his promises to voters with anti-establishment policies, only to be repeatedly repelled by the system's resilience. Unable to deliver on his economic promises, he turned to great-power chauvinism to maintain his approval ratings. Venezuela's easy victory gave him fatal confidence. Driven by Israel, he led the system's full military force to crash into the weakest point of the Middle East order. This act of shattering the system unleashed the IRGC, which had been silently accumulating outside the system for forty years. The steering wheel of the IRGC has shifted from the hands of clerics to that of a revolutionary soldier who shook hands with Zawahiri, a man whose life's mission is to destroy the US-led order. He has seized control of the system's energy lifeline, and he draws power from the system's destruction. Trump can only continue fighting on behalf of the system. But the harder he fights, the higher oil prices rise, the stronger the IRGC becomes, the more painful his voters are, and the deeper the cracks in the global order deepen. The world's most accustomed to retreating is trapped in a position where retreat is not an option. A man who considers "flexibility" his core strength is nailed to rigid reality. The irreversibility he created has rendered his core capabilities useless. The era of TACO is over.