President Donald Trump’s serial habit of chickening out on his disruptive tariff announcements has now become a shorthand for Wall Street traders making financial transactions based on his pattern of activity: TACO.
TACO stands for Trump Always Chickens Out and investors now refer to the “TACO trade” when discussing where to put their money. The Trump habit of backing off from his tough talk significantly undermines one of the central ideas Trump campaigned on and continues to govern under, the notion that he is a lone maverick bucking the recent trend of global economics.
The most recent TACO incident occurred after Trump threatened on Friday that he would impose 50% tariffs against the European Union on June 1. But by Sunday, Trump said a “very nice” conversation with the president of the European Commission had led him to retreat, and by Tuesday he claimed the entire fiasco was a brilliant ploy of his own design.
But TACO traders saw it coming. On the same day Trump made his announcement, Salomon Fiedler, an analyst for Germany’s Berenberg bank wrote, “Given the damage the U.S. would do to itself with this tariff, he will probably not follow through.”
Protesters march down Fifth Avenue between 42nd Street and 23rd Street to speak out against Trump and Elon Musk's agendas.
To be fair, Fiedler simply had to look at the news since Trump took office to make his prediction.
On April 2, Trump declared “Liberation Day” and announced a series of tariffs affecting multiple countries. The global markets tanked as it became clear that if enacted, the tariffs would raise costs for consumers and lead to reduced spending—hurting the domestic and international economy. By April 9, Trump was chickening out, declaring a 90-day pause on the tariffs after most world governments refused his demands to discuss tariff policy after the radical, unilateral action.
On May 12, it was TACO time again as Trump announced he would lower the tariffs he had placed on goods imported from China.
But despite Trump’s serial retreats, his tariff actions are hurting consumers and American businesses and their employees. The tariffs have caused the prices of goods like board games, video games, and toys to go up—creating a ripple effect that has led to layoffs and product delays. Even products like flowers have seen price increases, which has thrown a wrench into ordinary moments like Mother’s Day and weddings.
The TACO habit has led to lowered consumer sentiment from both Democrats and Republicans when surveyed. It has also opened up the opportunity for those close to Trump to make suspiciously well-timed and lucrative stock trades that benefit from the erratic nature of his decisions.
In his first term, Trump opened up a trade war with China and lost after that nation didn’t bend to his demands. Americans bore the cost and had to put up billions to help farmers who couldn’t sell their goods because of Trump’s decisions. Back in the White House, Trump has doubled down on bad policy and the only beneficiaries have been the TACO traders.
Campaign Action
