š® Flooding the Zone?
What markets say about Trumpās expanding global ambitions
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During his first term and much of the ā24 campaign, the big themes of Trumpās foreign policy were:
Pulling back from Americaās global commitments
Getting allies to pay up for security
A personalized negotiating style
Peace through strength: High military spending and occasional strikes, but avoiding getting involved in new ground wars
Above all, things could flip fast: Trump threats of nuclear annihilation in one month could blossom into love letters by the next.
But now under 100 days into the second Trump term, we are seeing a different set of headlines:
Trump is āvery seriousā about taking over Greenland
Gaza will be re-developed into an American-led resort
Canada, or at least some parts of it, will join the Union as the 51st state
America will re-take the Panama Canal
And after all this, in 2029, an 82-year old Trump will begin his third term as president using the VP switch maneuver.
What Markets Say
Is Trumpās muscular isolationism giving way to a program of greatness via bolt-on acquisition? Polymarket traders are highly skeptical about any of these things happening ā at least as far as the end of 2025.
Panama Canal
Of all of Trumpās mergers and acquisitions, Trump acquiring the Panama Canal before the end of 2025 is the most likely, with a 14% chance it happens.
The Trump administration has accused Panama of overcharging American ships, and expressed concern about Chinese influence over CK Hutchison, the Hong Kong-based conglomerate that operates the ports:
Trump has not ruled out military force to retake the canal, but attention has been focused on a possible deal for Blackrock to buy two strategic ports along the canal. Over the weekend, CK Hutchison reportedly backed out of the port sale, which does not seem to have affected this marketās odds.
Greenland
Odds for Trump to acquire Greenland in 2025 briefly hit 20% on inauguration day but have been cut in half as it became clear that Greenlanders are opposed.
Trump first expressed interest in buying Greenland in 2019, and he is reported to covet its strategic access to the Arctic, satellite downlink location, and mineral deposits (which the FTās Javier Blas has suggested are overrated).
The recent trip by JD and Usha Vance has not moved the needle, and Trumpās pressure seems to have driven Greenlanders further into the arms of Denmark, with odds they vote for independence crashing from 30% to just 3% today.
NATO
Greenland is a territory of Denmark, which is a member of NATO. And an aggressive Trump move to take over Greenland would be a sticky situation. Would one of the countries be ejected from NATO or voluntarily leave?
Odds for any country to leave NATO this year spiked above 20% after the fiery Trump-Zelensky Oval Office meeting but have cooled since.
Gaza
Of all the possible places Trump could acquire in 2025, Gaza, where an estimated 70% of all structures were destroyed in the recent war, seems to make the least sense geopolitically.
The press likes to mock the idea of a Trump resort in Gaza, however a recent article by former diplomat Ethan Chorin floats the idea of an ambitious port and logistics deal in Gaza as a basis for ending the war and countering Chinese influence in the region.
But the market doesn't seem to be buying it, and, aside from an initial spike on February 10, when Trump seemingly gave Israel a greenlight to resume fighting there, the odds for a Trump Gaza acquisition have been steady at 10%.
The Bannon Doctrine
Steve Bannon likes to talk about a strategy called āflooding the zoneā - overwhelming the opposition with a cocktail of action and bullshit that leaves them paralyzed.
The fact that all these markets (along with US acquires any Canadian territory in ā25) are all trading like longshots, and all surfacing at the same time that Trump is moving aggressively on domestic policy with DOGE, could be a ātellā that this is whatās going on.
Any one of these moves on its own could possibly turn into a hot war, or at very least be a big shakeup to the current geopolitical order. And itās unlikely that Trump would be able to do all of them at the same time, so perhaps this is why the market is valuing them all in the 10-15% range.
On the bright side, the 2025 geopolitical markets are still seeing a distribution of scenarios much more skewed towards peace than war:
Russia-Ukraine Peace in 2025 (š®50%, although odds have fallen from a high of 78% in early March)
Iran nuclear deal (š®25%, and rising slightly with Trumpās recent threats)
Gaza ceasefire (š®70% by May)
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