- Saturday, June 07, 2025
Financial Times columnist Robert Armstrong had observed that markets generally tumble when Trump makes tariff threats and then recover after he backs down
By: India Weekly
AFTER a US trade court put brakes on his tariffs policy, US President Donald Trump had a heated exchange with a reporter over his frequently changing stance on tariffs.
During his customary press briefing at White House on Wednesday, Trump got very upset when a reporter asked him whether the term ‘TACO trade’ might be a valid description of his approach to tariffs.
The TACO in question does not pertain to the popular Mexican dish, but an acronym coined by the Financial Times columnist Robert Armstrong – ‘Trump Always Chickens Out’.
He used this to describe how markets respond to the US president’s tariff policies. They generally tumble when he makes tariff threats and then recover after he backs down.
This coinage soon gained traction among analysts and commentators to describe a recurring market pattern after Donald Trump rolled out the chaotic reciprocal tariff regime on April 2.
Trump’s tariff threat put markets on a tailspin, but then he pulls back or delays, giving countries more time to negotiate.
Megan Cassella of CNBC, asked: “Mr President, Wall Street analysts have coined a new term called the ‘TACO’ trade. They’re saying Trump always chickens out on your tariff threats, and that’s why markets are higher this week. What’s your response to that?”
Trump said, “This country was dying. Six months ago, this country was stone-cold dead. We had a country of people who didn’t think it was going to survive. And you ask a “nasty” question like that. It’s called negotiation.”
Taking exception to the term ‘chicken out’, he said, “I chicken out? I’ve never heard that.”
“Don’t ever say what you said,” he told the reporter. “That’s a nasty question. To me, that’s the nastiest question.”
Regarding the trade row with China, he said he helped them by easing the “very high” tariffs that was initially imposed.
“We were very nice to China. I don’t know if they’re going to be nice to us. We helped them, they were having difficulty because we were basically going cold turkey with them.”
Similarly, last week he threatened to impose a 50 per cent tax on goods from the European Union starting June, only to delay the tariff hike until July 9 so that negotiations can occur.
