‘TACO Trade’ Trends as Trump Tariff Flips Spark Fury/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street has coined a new term — “TACO,” short for Trump Always Chickens Out — mocking the president’s pattern of tariff threats followed by abrupt reversals. President Trump lashed out at the acronym during a press conference, calling the question “nasty.” Meanwhile, traders continue profiting off the unpredictability, as recent rollbacks on EU and China tariffs underscore the phenomenon.
TACO Trade Mockery: Quick Looks
- TACO = Trump Always Chickens Out, a Wall Street acronym for tariff flip-flops.
- Coined by the Financial Times, it has become a hot shorthand for traders.
- Trump was visibly angry when asked about it during an Oval Office press event.
- Recent reversals include:
- Scaling down sweeping global tariffs post-“Liberation Day”
- Slashing China’s 145% retaliatory tariff to 10%
- Delaying EU tariff hikes until July
- Traders capitalize on the volatility Trump’s tariff unpredictability creates.
- Trump denies backing down, says critics usually call him “too tough.”
- The term has gone viral, sparking debate in financial and political circles.
- Wall Street sees patterns, using TACO trades as a play on Trump’s negotiation style.
Deep Look: Wall Street’s “TACO” Trade Gets Under Trump’s Skin
WASHINGTON, D.C. — It’s not the first time President Donald Trump has been mocked by Wall Street, but the latest jab — and its catchy name — has struck a nerve.
Financial traders have dubbed a new market strategy the “TACO trade”, shorthand for Trump Always Chickens Out. The nickname reflects the president’s well-documented pattern of announcing punishing tariffs on foreign imports, only to reverse course before enforcement kicks in.
The term gained traction after being coined by the Financial Times, and it’s quickly become Wall Street’s favorite way to profit off of Trump’s tariff theatrics.
Trump Lashes Out
During a White House press event Wednesday, Trump grew visibly irritated when asked for his response to the acronym.
“Don’t ever say what you say, that’s a nasty question,” Trump snapped.
He rejected the idea that his behavior could be considered “chickening out,” insisting he often gets criticized for being too aggressive.
“They will say, ‘Oh he was chicken.’ That’s so unbelievable,” he added. “I usually have the opposite problem — they say you’re too tough!”
But Trump’s recent tariff pivots seem to tell another story.
The Flip-Flops That Fueled the TACO Trend
Among the biggest reversals:
- A proposed 145% retaliatory tariff on China was quickly reduced to 10% after Beijing and Washington struck a détente.
- A threat to hike EU tariffs to 50% was dialed back, with the deadline pushed to mid-July.
- Sweeping global tariffs were trimmed to a baseline 10%, far below initial announcements.
Each about-face gave traders opportunities to bet on short-term volatility. Some firms have even modeled automated algorithms around the TACO pattern.
Profiting from Predictability in Chaos
While the administration defends the reversals as strategic flexibility, investors are seeing patterns.
“The president threatens, the markets react, and then he pulls back — it’s become predictable,” one Wall Street analyst told Reuters.
These trades, now dubbed “TACO trades”, are particularly lucrative for investors able to short currencies, commodities, or foreign stocks during tariff escalations — and then reverse those positions when Trump retreats.
Damage to Credibility?
Trump’s critics argue that while traders may profit, America’s global credibility suffers.
Repeated tariff reversals make it harder for foreign allies and adversaries alike to gauge the true direction of U.S. economic policy.
“It’s not negotiation — it’s instability,” said an international trade expert at the Peterson Institute for International Economics.
Political Optics vs. Market Strategy
- His base sees tariffs as a tool for protecting American industry.
- Markets, however, view his moves as erratic — and profitable.
In trying to please both sides, Trump may be walking a tightrope between economic nationalism and market chaos.
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