Trump angered by "TACO," market uncertainty has risen again

As the smoke of the global trade war rises again, a simple four-letter abbreviation in the Wall Street financial circle—“TACO” (Trump Always Chickens Out)—has pricked the nerves of the U.S. President and may trigger more intense and unpredictable market fluctuations.

Since May, the uncertainty surrounding trade policies has significantly declined from the peak in early April, but with various tariffs and restrictive policies returning to the headlines, uncertainty has risen again.

Trump's trade policies have shown a characteristic of being erratic. Just in the past week, he threatened to impose a 50% tariff on the EU, only to extend the implementation deadline shortly after.

Why did “TACO” ignite Trump's anger? It's not just the language, but also the face.

The abbreviation “TACO” was first proposed by Robert Armstrong of the Financial Times on May 2, to summarize Trump's erratic pattern in tariff policies—first throwing out exorbitant threats, then retreating under market pressure or negotiation compromises.

Armstrong pointed out that this pattern has become a market norm: Trump's tariff threats often lead to stock price declines, but when he shifts his policy, the market quickly rebounds. Wall Street quickly internalized this, and traders even incorporated “TACO” as part of their trading strategy, betting on the President's “chicken out” moments.

Within just a few weeks, “TACO” rapidly became a staple of conversation on Wall Street, and Trump's reaction to “TACO” was intense. At a White House press conference on Wednesday, when asked about the term, Trump angrily retorted, “Never say what you just said. That’s a vicious question… For me, that’s the most vicious question.”

According to media reports, Trump was not only angry about the term itself but also dissatisfied that his team failed to inform him in advance that the term was gaining popularity in the market.

A source revealed to the media:

“What he cannot tolerate the most is that people think his tariff adjustments are a sign of weakness.”

“‘TACO’ clearly touches his core pain point— as a self-proclaimed tough negotiator, any suggestion of him showing weakness is unacceptable.”

It is noteworthy that although Trump's trade threats often cause market fluctuations, U.S. stocks have just completed their best May performance since 1997. This performance somewhat confirms the “TACO trade”—market participants have begun to look for rebound opportunities following Trump's trade threats.

Trump has viewed “TACO” as a personal challenge

Analysts point out that Trump has always prided himself on being an excellent negotiator and strategist, despite ample evidence suggesting otherwise. Naturally, he would feel outraged at being labeled a "chicken"—especially since such a label is predictable Trump once stated in an interview that he admires the notorious mob boss John Gotti because Gotti never backed down, never flinched or cried in court, but instead glared at all his opponents. This is Trump's view of himself—definitely not a coward.

More notably, Trump seems determined to counter the mockery from "TACO."

On Thursday, the U.S. International Trade Court ruled that Trump did not have the authority to unilaterally impose tariffs using presidential emergency powers, a ruling that could have provided him with a dignified exit. However, perhaps spurred by the "coward" label, he chose to appeal to the Supreme Court and successfully obtained a temporary exemption.

While the final ruling from the U.S. Court of Appeals remains unknown, the White House has made it clear: even if the court ultimately restricts his powers, Trump will seek other ways to continue pushing his tariff policies.

Regardless of the outcome, Trump has clearly viewed "TACO" as a personal challenge. His public statements reveal strong dissatisfaction:

"If I reach a more reasonable agreement with them, they will say, 'Oh, he backed down, he's a coward.' It's truly unbelievable."

This sentiment may drive him to take a tougher stance.

Analysts warn that a Trump eager to prove he is not a coward may adopt a harder line to maintain his self-esteem and image, even at the cost of economic and social consequences.

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at their own risk