Latest news with #TacoTrade
Daily Mail
13 hours ago
- Business
- Daily Mail
What is the Taco Trade and how is it linked to President Trump's tariffs?
Many on Wall Street see the president's mercurial behaviour as a way to capitalise on the 'Taco Trade.' This involves buying stocks after markets go down due to President Donald Trump imposing or threatening tariffs, then selling them as their value recovers when the president declares a pause or retreat. Coined by Financial Times journalist Robert Armstrong, Taco stands for 'Trump Always Chickens Out.' It essentially means Trump will reverse course if the economic fallout from his tariff policies becomes too severe and obvious. Near the end of May, President Donald Trump warned that he would slap a 50 per cent tariff on goods imported from the European Union starting from the beginning of June. He said negotiations were 'going nowhere' with the trading bloc, which sold more than $600billion of goods to the US last year. Yet after shares spiralled and the EU said it would not make a deal based on 'mutual respect, not threats,' Trump backed down just two days later. He said the tariffs would instead be imposed from 9 July. US stocks subsequently soared the following Tuesday. It was not the first time Trump has backtracked on tariffs; he agreed to lower taxes on imported Chinese goods from 145 per cent to 30 per cent last month for 90 days after China raised their own levies on US products to 125 per cent. And on 9 April, the US president suspended 'reciprocal' tariffs - higher import taxes on dozens of nations - announced in his 'Liberation Day' speech the previous week. As Armstrong wrote: 'The US administration does not have a very high tolerance for market and economic pressure, and will be quick to back off when tariffs cause pain.' Trump unsurprisingly reacted badly when asked about the acronym by a reporter, calling her question 'nasty.' He remarked: 'I think we really helped China tremendously because, you know, they were having great difficulty because we were basically going cold turkey with China. 'We were doing no business because of the tariff because it was so high. But I knew that.' More recently, the president reignited uncertainty into the global trading system as he warned of his intentions to double tariffs on steel and aluminium imports to 50 per cent. And on Monday, China accused the US Government of 'seriously violating' the trade deal agreed last month in Geneva, Switzerland. Tom Hibbert, multi-asset strategist at Canaccord Wealth, said 'there is an element of negotiating strategy' in Trump's approach to tariff policy, 'although it relies more on blunt force than measured diplomacy, which has introduced huge uncertainty.'
Irish Times
3 days ago
- Business
- Irish Times
Trump and the ‘nasty' Taco trade
The bad news: even if the appeals court had not overturned the recent US trade court ruling declaring most of Donald Trump 's tariffs illegal, Goldman Sachs expects the White House would find new ways to impose duties anyway. The good news: investors seem unfazed either way. The Taco trade – short for Trump Always Chickens Out – has become Wall Street's shorthand for profiting off presidential tariff tantrums. Trump announces sky-high levies, markets plunge, then he backs off and stocks soar. Repeat. April's 'liberation day' tariffs sent the S&P 500 tumbling 12 per cent. Spooked by market turbulence, Trump paused the plan, sparking the index's best day in 17 years. A May trade truce with China lifted stocks again. READ MORE And the sell-off that followed Trump's recent 50 per cent tariff threat on the EU was reversed within days when Trump delayed the levy. A sensitive soul who prides himself on being the world's great dealmaker, Trump predictably took offence about what he deemed to be a 'nasty' question about the Taco trade at a White House press conference, insisting it's just 'negotiation'. It's tempting to mock Trump's tariff theatrics, but doing so too freely carries risks – pushing him could harden his stance and unsettle markets in ways the Taco trade doesn't fully anticipate. As BCA Research's Peter Berezin tweeted: 'The first rule of the Taco trade is that you don't tell Trump about the Taco trade.'
Yahoo
3 days ago
- Business
- Yahoo
Investor playbook: 'TACO' trade gains steam but isn't foolproof
US markets (^GSPC, ^IXIC, ^DJI) are swinging on shifting trade signals and tariff uncertainty tied to President Trump's latest comments and legal setbacks. Yahoo Finance Senior Reporter Allie Canal breaks down how the so-called "TACO" trade ("Trump Always Chickens Out") is shaping investor sentiment and what to watch ahead of jobs data next week. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Well, it's been another busy week of policy pivots, headline whiplash, and economic data that's left investors more confused than confident. But through it all, one phrase has gained prominence this week: the "Taco Trade," short for "Trump Always Chickens Out." That phrase sums up a growing view that while the president talks tough on tariffs, he rarely follows through. And it's that assumption that's driven the market recovery we've seen over the past month. Still, it's not foolproof. We saw sentiment take a hit today after Trump fired off a post on Truth Social, accusing China of quote "violating its trade deal." Just hours later, Bloomberg reported the Trump administration is planning to tighten tech sanctions targeting Chinese subsidiaries that have been skirting existing curbs. The news initially sent stocks sharply lower, before we saw a bit of a rebound heading into the close, and adding another twist to the saga, a federal trade court in Manhattan struck down a swathe of Trump tariffs, citing legal flaws in how they were imposed. And although a federal appeals court temporarily paused that ruling, it's just adding more fuel to the fire when it comes to a lot of this market uncertainty. Looking ahead, some say stocks are banking too heavily on Trump backing down again. Here's what Wall Street experts told Yahoo Finance this week. We told Donald Trump that that we have this Taco Trade, and so I worry a little bit that that actually makes him bear down a little bit more and decide to be more, you know, more gripping on some of these tariff trades. And so, I have a little bit of a concern that that creates actually more uncertainty. So, I don't think this is the last word on tariffs, but I agree this is a roller coaster ride, not good for long-term planning and not good for corporate investment. Based on the past, we're going to get a lot of, "He loves me, he loves me not," the Taco Trade, the Tofu Trade. We're going to get a lot of that talk back and forth. But what investors really need to be focused on is economic data, especially the jobs week that's coming up next week and what the Fed is doing in response. So, bottom line here, the Taco Trade may still potentially have some mileage, but as politics, policy, and legal realities collide, that bet could be looking a lot riskier. And guys, I looked up what exactly the Tofu Trade is that Callie Cox referenced. Apparently, it's been circulating on ExitStat. Trump always likes to intervene when markets are at highs. I don't really know how the acronym plays out fully there, but it just goes to show how investors are really trying to understand this administration amid all of these shifting trade policies. Yeah, it is hard to follow. Acronyms can help though. Ali, thank you, appreciate it.
The Guardian
5 days ago
- Business
- The Guardian
Trump Always Chickens Out: investors cook up ‘taco' narrative for president's U-turns
Trump Always Chickens Out – or Taco for short. Investors like narratives to explain the financial world, and they appear to have seized on this one: whenever Donald Trump faces a market backlash, he will back down. It would be fair to say the US president did not take kindly to the suggestion he was being a 'chicken' when asked by a reporter at the White House about the term that is gaining traction on Wall Street. 'Oh isn't that nice – 'I chicken out.' I've never heard that,' Trump mused on Wednesday in response to the reporter's question on the so-called Taco trade. He then launched into extended comments on how high the tariffs he imposed on China were, and how he had 'helped' China by cutting them. 'But don't ever say what you said,' he added to the reporter. 'That's a nasty question.' Apparently riled, he later returned to the theme, insisting that he was no chicken, and that often people accused him of being too tough. But recurrent retreats by Trump have become the basis for stock markets rebounding after falls, even as the US president has raised tariffs to their highest level in more than a century. The S&P 500, the US stock market benchmark, has gained about 1% during 2025, despite a deep slump in April as Trump announced 'liberation day' tariffs on trade with most countries in the world. The stock market rise appears to have been aided by the Taco trade narrative: that market turmoil will correct the president's course and allow companies to keep on making strong profits. That belief will strengthen if courts uphold a Wednesday night ruling by New York's court of international trade that Trump's tariffs have been imposed illegally. When the Financial Times columnist Robert Armstrong coined the Taco acronym on 2 May, it was a pithy observation of market reaction to Trump's chaotic policymaking. However, less than a month on, one question is whether being accused of being 'chicken' will needle the president to take a harder line with trading partners. On some fronts – notably on transporting people to El Salvador without due process – the Trump administration has indeed defied barrages of criticism and several court orders. Yet on financial markets, the pattern is clear of a harsh initial position followed by a sizeable retreat. The partial climbdowns have often followed close behind slumping bond prices – increasing US government borrowing costs – a dynamic that could expose the world's largest economy if left unchecked. Sign up to Headlines US Get the most important US headlines and highlights emailed direct to you every morning after newsletter promotion The liberation day tariff announcement was followed by a 90-day pause. Trump said he would raise EU tariffs to 50%, before delaying that until 9 July. He ratcheted up levies to a punitive 145% on China, before dropping them to 30% during a 90-day pause. And he toyed with forcing out the Federal Reserve chair, Jerome Powell, only to backtrack quickly once investor displeasure became clear. However, the market optimism has not matched economic forecasts, which suggest that the White House's actions are still historically significant.
Time of India
5 days ago
- Business
- Time of India
TACO Trade Attack: Trump LOSES Cool During Presser; Internet Erupts In Memefest
/ May 29, 2025, 06:13PM IST Donald Trump was visibly irritated when asked about the viral financial term "TACO trade"—an acronym for "Trump Always Chickens Out"—referring to a market pattern where Trump's tariff threats cause stock dips, followed by rebounds when he retreats. The term, coined by Financial Times columnist Robert Armstrong, surged online after Trump dismissed the question as 'nasty.' Despite Trump's denial, social media exploded with memes and AI-generated images showing him as a chicken, making #TacoTrade a trending topic. Analysts say Trump's tariff zigzags are being used by investors for profit cycles.
