- विज्ञापन -
Wall Street has a new buzzword, and it ’s not what you’d expect. Coined by Financial Times columnist Robert Armstrong, the phrase “Taco” trade is attracting attention for both its sharp acronym and the political commentary it implies. Standing for “Trump Always Chickens Out,” the term is a pointed jab at former U.S. President Donald Trump’s repeated pattern of announcing aggressive trade measures, only to soften or reverse them later.
The term first appeared in Armstrong’s columns analyzing investor reactions to Trump’s tariff threats. Over time, markets have learned to adjust their expectations, factoring in the likelihood that Trump’s bold declarations are often followed by quieter retreats. This cycle of escalation followed by de-escalation has become predictable enough that investors have started to treat Trump’s tariff threats as temporary bluster rather than policy certainties.
The essence of the “Taco” trade is simple: whenever Trump threatens to impose steep tariffs or import taxes, often targeting countries like China or trading blocs such as the European Union—markets initially react with fear. Stock prices fall, tradedependent companies worry, and economic analysts brace for impact. But then, as has happened repeatedly, Trump reverses course or delays implementation, leading to a bounce-back in investor confidence and market performance.
This pattern has occurred so frequently that the term “Taco” trade became shorthand for betting against the full realisation of Trump’s harsher trade threats. In other words, investors are now less likely to panic when Trump makes a bold pronouncement about new tariffs because history has shown that he often dials back those plans.
Since his first year in office in 2017, Trump has modified or walked back dozens of proposed trade actions. A review by The Washington Post noted that over 50 such moves were either retracted or significantly altered after initial announcement. One high-profile case involved proposed tariffs on Chinese imports, where Trump initially threatened a 145% duty.
This was later reduced to 30% during a 90-day negotiation window. Another recent example includes Trump’s warning of 50% tariffs on European Union goods, which he later postponed to July 9 to allow further diplomatic talks. In the meantime, the previous 10% duty remains in place. This pattern has been seen in sectors as varied as automotive imports, consumer electronics, and general trade with nations experiencing large trade surpluses with the U.S. T h e markets have responded in kind.
Sharp declines after aggressive tariff announcements are frequently followed by recoveries once the administration scales back its plans. Investors have gradually come to expect that Trump may start with an extreme position, only to use it as leverage for negotiations. Former President Trump didn’t take kindly to being branded a “chicken.” When asked about the “Taco” trade phrase by a reporter, Trump visibly bristled. “You call that chickening out?” he retorted. “It’s called negotiation.”
Trump defended his approach as part of his broader strategy, saying he often begins trade talks with an intentionally high and provocative figure. “I start with a ridiculous high number and then lower it a little bit,” he explained, suggesting that this tactic forces other countries to the negotiating table. He rejected the idea that backing off from harsh tariffs represented weakness. “Don’t ever say what you said,” Trump told the reporter. “To me, that’s the nastiest question.”
He insisted that his moves were about building pressure and then easing it as part of international diplomacy. In Trump’s view, the tough rhetoric serves a purpose: compelling other nations to engage. Referring to his interactions with European leaders, he noted that after his tariff threats, EU offcials called him asking for immediate talks. “They wouldn’t have talked if I hadn’t done it,” he said. He also pointed out that criticism usually focuses on him being too harsh, not too lenient. “People don’t say I’m soft. They say I’m too tough,” he said. While Trump may shrug off the nickname, his approach to trade has faced more serious challenges in the courts.
On the same day he responded to the “Taco” trade term, a U.S. federal court delivered a significant blow to his recent tariff strategy. The U.S. Court of International Trade ruled that Trump had exceeded his presidential authority by invoking the 1977 International Emergency Economic Powers Act to impose sweeping tariffs. A panel of three judges concluded that the emergency powers cited were too broad and not applicable in the way Trump had used them. This decision blocks the broad new tariffs Trump had imposed last month on nearly every U.S. trading partner, as well as earlier levies on nations like Canada, Mexico, and China.
However, it does not affect tariffs enacted under separate laws, such as those on steel, aluminum, and cars, which involved formal reviews by the Commerce Department. The ruling underlined the legal complexity of Trump’s trade maneuvers and highlighted the tension between executive authority and legislative oversight in economic matters.
The “Taco” trade label may be tongue-incheek, but it points to a deeper trend in Trumpera economic policy—one defined by unpredictability, headline-grabbing threats, and sudden shifts. Whether viewed as clever negotiation or erratic policymaking, this approach has reshaped how global markets react to American leadership.
While Trump remains defiant, insisting his tactics are effective, the term has now entered financial and political lexicon as a symbol of both his negotiation style and its perceived limits. Whether the name sticks— or is replaced by something Trump prefers—remains to be seen.
