---
title: "Analysis: Wall Street is again betting on the Trump-TACO deal, with market forecasts indicating only a 17% probability of tariffs being imposed on Europe."
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/273087241.md"
description: "Wall Street is betting on the Trump-TACO deal, with only a 17% probability of tariffs on Europe, according to Polymarket data. This reflects the 'TACO' trading strategy, suggesting investors expect Trump to back down on tariff threats. Deutsche Bank's Jim Reid noted the market's potential for movement, while UBS Chief Economist Paul Donovan stated that bond investors are not overly concerned about these threats, indicating a rational market response."
datetime: "2026-01-20T12:48:00.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/273087241.md)
  - [en](https://longbridge.com/en/news/273087241.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/273087241.md)
generator: "portal-rs"
---

# Analysis: Wall Street is again betting on the Trump-TACO deal, with market forecasts indicating only a 17% probability of tariffs being imposed on Europe.

Polymarket data shows that only 17% of users believe Trump's threat to impose all tariffs on Europe will take effect on February 1st. This market sentiment reflects the "TACO" (Trump Always Chickens Out) trading strategy, where investors bet that Trump will eventually abandon his tariff threats. Jim Reid of Deutsche Bank noted that the market "has more room to move," adding that the market has previously suffered losses due to overreacting to tariff threats. UBS Chief Economist Paul Donovan believes the market is behaving rationally, and bond investors do not seem to be taking these threats too seriously. (Fortune)

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**