Markets React to Trump’s Tariff Flip-Flops \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ President Donald Trump rejected claims that he consistently backs down from extreme tariff threats, branding such accusations as unfair. Critics have dubbed his trade style “TACO”—Trump Always Chickens Out—due to repeated market-shaking threats followed by retreat. Trump insists his approach is strategic negotiation, not cowardice.
Quick Looks
- Trump responds angrily to term “TACO”—Trump Always Chickens Out.
- Says high tariffs are strategic starting points in negotiation.
- Has repeatedly threatened and then delayed or scaled back tariffs.
- Recent 50% EU tariff delayed until July for talks.
- Similar pullbacks seen with China, autos, and electronics tariffs.
- Markets have dipped on threats, then rebounded after retreats.
- S&P 500 was down 15% in April, now slightly up.
- Trump claims $14 trillion in new U.S. investment—a figure not independently verified.
- Insists EU is only negotiating due to his tough stance.
Deep Look
President Trump Rejects “Chickening Out” Label as Tariff Tactics Rattle Global Markets
President Donald Trump is pushing back forcefully against growing criticism that his administration repeatedly backs down from aggressive tariff threats—a pattern that has earned the label “TACO,” short for “Trump Always Chickens Out.” The term, popularized by The Financial Times‘ Robert Armstrong, refers to Trump’s tendency to announce extreme tariffs, cause market turmoil, and then retreat under economic and political pressure.
Now in his second term, President Trump continues to make tariffs a centerpiece of his economic and foreign policy agenda. His approach has sent shockwaves through markets and foreign capitals alike. On Wednesday, Trump was visibly angered when asked about the “TACO” nickname, calling the reporter’s question “nasty” and rejecting any suggestion that he lacks resolve.
“You call that chickening out? It’s called negotiation,” Trump responded. “I put out a ridiculous high number and then go down a little. That’s how you get a deal.”
Trump cited his decision to initially set tariffs on Chinese goods at 145% before reducing them to 30% for a 90-day negotiation window as a successful example of his strategy. A similar scenario unfolded last week when he proposed a 50% tariff on European Union imports, only to postpone the hike until July 9 to allow talks to continue under a base 10% tariff.
The President maintains that these tactics are intentional and part of a broader plan to pressure trading partners into fairer deals. “If I didn’t threaten that 50% tariff, the EU wouldn’t even be talking to us,” Trump declared. “I’m not backing off. I’m leading.”
Critics, however, see a different picture. They argue that Trump’s habit of issuing sudden, dramatic tariff announcements followed by partial or full walk-backs has created a climate of instability. Investors have reacted accordingly: the stock market typically plunges on the initial threat, then rebounds once the administration backs away from the harshest measures.
The volatility has been particularly evident in the S&P 500. The index dropped as much as 15% earlier this year after Trump floated across-the-board universal tariffs tied to each country’s trade deficit with the U.S. As of this week, the index has recovered slightly, though investors remain cautious about the administration’s unpredictable economic policy signals.
Despite concerns from business leaders and economists, Trump insists his policies have fueled economic growth. He claimed this week that his trade agenda has attracted $14 trillion in new investment into the United States—an estimate widely viewed as exaggerated and lacking independent verification. Still, the President continues to tout it as evidence that his America First trade vision is working.
Internationally, Trump’s actions have led to tense trade relations, particularly with China and the EU. Negotiators have complained about the difficulty of engaging with an administration that frequently shifts its stance, but the White House sees this as a feature, not a flaw. According to Trump, his unpredictability keeps adversaries off-balance and gives the U.S. leverage.
“Our problem isn’t being too soft,” he said. “It’s being too tough. And I’m fine with that.”
The President’s negotiation style has drawn comparisons to his earlier real estate career, where he often started with inflated demands before agreeing to a compromise. Applied to international trade, however, the approach has global consequences—from price volatility and strained diplomatic ties to lost revenues for exporters and uncertainty for U.S. manufacturers.
Supporters say Trump’s aggressive stance is necessary to rebalance long-standing trade deficits and protect American jobs. Detractors warn that the constant threats and reversals damage U.S. credibility and could trigger retaliatory measures from allies and competitors alike.
With trade talks ongoing and global markets closely monitoring each of Trump’s statements, the world continues to ride the wave of his tariff-driven diplomacy. Whether it results in long-term gains for the U.S. economy—or long-lasting instability—remains one of the defining questions of his current presidency.
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