Trump's "TACO Trade" Meltdown Did Wall Street Just Get Under His Skin?

Trump Lashes Out at Reporter Over 'TACO Trade' Jibe: A Look at Wall Street's Tariff Skepticism

President Trump found himself on the defensive Wednesday during a White House press briefing, facing questions about a newly coined term circulating on Wall Street: the "TACO trade." The acronym, standing for "Trump always chickens out" in reference to his tariff threats, clearly struck a nerve.

When asked about the term by CNBC's Megan Cassella, Trump responded sharply, stating, "Don’t ever say what you said. That’s a nasty question. To me, that’s the nastiest question." The tense exchange highlights the growing skepticism in financial markets regarding the president's approach to international trade.

The Origin of the 'TACO Trade'

The "TACO trade" is attributed to Financial Times columnist Robert Armstrong, who first mentioned it in a May 2nd article. The New York Times further elaborated on the concept, explaining that it describes a recurring market pattern:

• Markets initially react negatively to Trump's tariff threats, experiencing a downturn.
• However, these markets quickly rebound as Trump seemingly softens his stance and grants countries more time for negotiation.

Trump Defends His Tariff Strategy

During the briefing, Trump attempted to clarify his tariff policy, questioning the reporter's understanding of his actions. "I 'chicken out'? I’ve never heard that. You mean because I reduced [tariffs on] China from 145% that I set, down to 100 and then down to another number?" he asked. He also pointed out that the current tariff on China is set at 30%.

Trump defended his negotiation tactics, stating, "It’s called negotiation. You set a number. And if you go down... you know, if I set a number, a ridiculous high number, and I go down a little bit... they want me to hold that number, 145% tariff."

EU Tariff Delay

Adding fuel to the "TACO trade" narrative, Trump recently delayed imposing 50% tariffs on goods from the European Union. Initially slated to take effect on June 1st, the deadline was pushed back to July 9th to allow for further negotiations with European trading partners.

A Broader Context

The exchange occurred during a swearing-in ceremony for Jeanine Pirro as U.S. Attorney for Washington, D.C. Trump appointed Pirro after his initial choice, Ed Martin, faced Senate opposition due to his views on the January 6th Capitol attack.

The Implications

The "TACO trade" moniker, whether accurate or not, reflects a growing perception that Trump's tariff threats may be more bark than bite. This perception can significantly impact market behavior and potentially undermine the effectiveness of future trade negotiations. The coming weeks and months will be crucial in determining whether Trump can reshape this narrative and reassert his control over the trade agenda.

Ultimately, the "TACO trade" incident serves as a potent reminder of the complex interplay between politics, economics, and market sentiment. As the trade landscape continues to evolve, staying informed and critically evaluating these dynamics will be essential for investors and policymakers alike.

Tags: Trump, TACO trade, Wall Street, tariffs, Robert Armstrong, trade war, financial markets, White House, press briefing, Megan Cassella, China, European Union, Jeanine Pirro

Source: https://variety.com/2025/biz/news/trump-responds-taco-trade-trump-always-chickens-out-tariff-threats-1236412080/