‘TACO trade’—coined by Financial Times columnist Robert Armstrong—describes Trump’s pattern of announcing steep tariffs and then easing them under market or diplomatic pressure. Global stocks plunged on April’s ‘Liberation Day’ duties but consistently recovered as Trump delayed or reduced levies against China and the European Union. A US Court of International Trade ruled in late May that the IEEPA-based tariffs exceeded presidential authority, prompting an appeal and a temporary stay pending a June 9 briefing. Trump defends his tariff shifts as deliberate negotiation tactics, arguing that initial high rates secure better concessions from trade partners. Analysts warn that the EU’s extension of its tariff deadline to July 9 and ongoing legal ambiguity will sustain the ‘TACO trade’ cycle of market swings.
