Overview

• The term “TACO trade,” coined by Financial Times columnist Robert Armstrong, stands for “Trump Always Chickens Out” and captures how markets rally when Trump retracts steep tariff threats.
• In a May 28 Oval Office briefing, Trump called the nickname a “nasty question” and rejected the notion that backing down on tariffs signals weakness.
• Since April’s sweeping ‘Liberation Day’ levies, the S&P 500 has swung as much as 15% as Trump threatened and then reduced or delayed duties on China, the EU and other trading partners.
• Following his decision to push a planned 50% European Union tariff to July 9 after talks with Ursula von der Leyen, the Dow Jones jumped 721 points on May 27.
• Late Wednesday, a U.S. Court of International Trade panel blocked most of the administration’s new tariffs, creating fresh legal uncertainty around Trump’s trade agenda.