U.S. President Donald Trump reacted angrily this week to a question referencing the growing use of the term “TACO trade” on Wall Street, a mocking acronym that stands for “Trump Always Chickens Out.” The label reflects investor frustration over Trump’s pattern of imposing or threatening aggressive tariffs, only to later retreat, often sending markets into sharp reversals.
The term was coined earlier this month by Financial Times columnist Robert Armstrong and has quickly gained currency among analysts who observe consistent market reactions to Trump’s tariff maneuvers. Traders have increasingly capitalized on this cycle buying during market dips triggered by tariff threats and profiting when tariffs are scaled back.
Trump dismissed the term when asked about it during a press event on May 28. “Oh, I chicken out. Isn’t that nice? I’ve never heard that,” he responded. The president then defended his decisions to reduce tariffs on Chinese goods for 90 days and to delay a 50% tariff on European Union imports until July 9, insisting these were part of broader negotiation tactics, not signs of weakness. “It’s called negotiation,” Trump said. “You ask a nasty question like that.”
Since Trump’s return to office, his administration has issued new or revised tariff policies over 50 times. While his initial moves in April included sweeping duties on imports at one point calling April 2 “Liberation Day” many of those tariffs were either reduced or temporarily lifted following adverse market reactions. Tariffs initially set at 145% on Chinese goods were later lowered to 30%, and exemptions were created for various sectors including electronics and imports from Canada and Mexico.
The “TACO trade” strategy has drawn increasing attention as market behavior becomes more closely linked to Trump’s trade pronouncements. On May 28, the stock market rallied following news of the EU tariff delay, and consumer confidence rose in May after five consecutive months of decline. The Conference Board reported a stronger-than-expected uptick, driven in part by diminished trade fears.
Economic officials have offered little clarity on tariff benchmarks. National Economic Council Director Kevin Hassett told the media that countries offering “good-enough” deals could see their tariffs drop to 10% or lower, though he declined to define what qualifies as acceptable.
Despite criticism from businesses over the volatility, Trump appears to relish his sway over markets. According to sources close to his team, the president Trump takes satisfaction in how a single announcement or social media post can move billions in global capital. “You call that chickening out?” Trump said, defending his adjustments as effective pressure tactics rather than policy reversals. – By MENA Newswire News Desk.