Overview

• The “TACO trade,” coined by Financial Times columnist Robert Armstrong, describes how markets tumble on Trump’s steep tariff threats and rebound when he pauses or cuts them.
• Investors have adopted this strategy by purchasing stocks after new tariff announcements in anticipation of eventual pullbacks.
• When pressed on the nickname in the Oval Office, Trump rejected the idea he was “chickening out,” calling it “a nasty question” and framing his actions as negotiation.
• Since April’s “Liberation Day,” Trump scaled back China levies from 145% to 30% and delayed a planned 50% tariff on EU goods until July 9.
• This week’s ruling by the U.S. Court of International Trade blocking most of the administration’s tariffs adds a legal dimension to the ongoing market swings.