On May 29, 2025, US President Donald Trump reacted sharply to a reporter's question regarding the acronym "TACO," which stands for "Trump Always Chickens Out." This phrase has recently emerged among traders and investors on Wall Street amid ongoing volatility caused by the President’s shifting trade policies.
The term "TACO," coined by a Financial Times journalist, captures a recurring pattern observed in the markets: President Trump announces sweeping tariff threats, triggering market downturns and investor anxiety, only to later reverse or lessen those tariffs, prompting relief rallies.
During an Oval Office event, Trump addressed the term directly, denying the suggestion. "I chicken out? Oh, I've never heard that. You mean because I reduced China from 145 percent that I set down to 100 and then to another number?" he remarked, referencing his adjustments to tariffs on imported Chinese goods. These tariffs initially peaked as high as 145 percent before being scaled back to the current 30 percent.
Trump's trade announcements have frequently caused market turbulence followed by recoveries. For example, he recently threatened to impose 50 percent tariffs on European Union goods with "no room to negotiate," only to postpone the tariffs after "promising talks," leading to a market rally after the Memorial Day holiday.
Responding to criticism, Trump insisted, "It's called negotiation. Don't ever say what you said," referring to the "nastiest" question about the "TACO" acronym.
This pattern of imposing and then easing tariffs is not new. On April 2, Trump announced reciprocal tariffs to be implemented on April 9 for multiple countries. However, hours after these tariffs went into effect, he paused them for 90 days for all nations except China, citing concerns about market reactions, saying investors were "getting yippy yappy."
Meanwhile, the US Court of International Trade recently ruled that Trump had exceeded his authority under the International Emergency Economic Powers Act (IEEPA) by imposing broad tariffs without Congressional approval. The court emphasized that regulating foreign trade is a Congressional prerogative, rejecting the administration’s emergency powers argument. The administration has filed an appeal, while Trump adviser Stephen Miller condemned the ruling as a "judicial coup" on social media.
As traders and investors continue to navigate the uncertainty, the debate over the President’s tariff policies and their legal basis remains a critical focus for the markets.
