What is Wall Street’s new acronym ‘TACO’ and why Donald Trump calls it ‘nasty’

May 29, 2025 12:40 AM IST

Donald Trump was asked about a new Wall Street acronym, TACO, at a press conference on Wednesday

President Donald Trump was asked about a new Wall Street acronym, TACO, at a press conference on Wednesday. The 78-year-old, visibly agitated, lashed out at the reporter, saying the question is ‘nasty’. TACO was dubbed by a Financial Times columnist as the TACO trade. It is an acronym that stands for ‘Trump Always Chickens Out’. The term refers to the president’s tendency to reverse his tariff threats.

Donald Trump addressed the TACO acronym on Wednesday(Bloomberg)

“I’ve never heard that. You mean because I reduced China from 145 percent that I set down to 100, and then down to another number, and I said you have to open up your whole country? And because I gave the European Union a 50 percent tariff and they called up and said, ‘Please let’s meet right now.’ You call that chickening out?” Trump said.

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“But don’t ever say what you said. That’s a nasty question. To me, that’s the nastiest question,” he further added.

What is TACO?

Coined by Financial Times columnist Robert Armstrong, TACO describes an alleged pattern where Trump announces aggressive tariff threats, causing stock markets to plummet, only to backtrack or delay these tariffs days later, triggering a sharp rebound.

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What is the TACO Trade?

The TACO strategy hinges on Donald Trump’s predictable reversals:

Tariff threats: Trump threatens steep tariffs, such as a 50% tariff on European Union imports announced on May 23, via Truth Social, or 145% tariffs on China in April 2025, causing market drops.

Backtracking: He then pauses or reduces these tariffs, like delaying the EU tariff on May 25 after talks with Ursula von der Leyen, or lowering China tariffs to 30%, leading to rallies.

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