Wall Street's 'TACO' Trade Mocks Trump's Tariff Reversals, Sparks Presidential Ire

Washington, D.C. — President Donald Trump lashed out at a reporter during a White House press briefing on May 28, 2025, after being questioned about the "TACO trade," a new Wall Street term that stands for "Trump Always Chickens Out." The phrase, coined by Financial Times columnist Robert Armstrong, describes a pattern in which Trump threatens steep tariffs—causing markets to plunge—only to reverse course, prompting a rebound and allowing savvy investors to profit from the volatility.

The question, posed by CNBC correspondent Megan Cassella, visibly angered Trump, who called it "the nastiest question" and insisted his approach was strategic negotiation, not retreat. "You call that chickening out? It’s called negotiation," Trump responded, citing examples such as reducing tariffs on Chinese goods from 145% to 30% and delaying a 50% tariff on European Union imports until July 9. Trump argued these moves revived a "stone-cold dead" U.S. economy and spurred renewed trade talks.

The "TACO" trade has quickly gained traction among investors, who have begun exploiting the predictable market swings. When Trump announces new tariffs, stocks typically fall; when he backs down, they rebound. The S&P 500, for example, rallied 2.1% after Trump postponed the EU tariff hike, highlighting the profitability of the strategy. The pattern has become so pronounced that some observers have raised concerns about potential insider trading, though no evidence has emerged.

Online, the "TACO" label has fueled a wave of memes, with viral images depicting Trump as a taco or with a chicken's head, amplifying the mockery and public attention. The controversy escalated further when a federal court blocked Trump’s "Liberation Day" tariffs on May 28, ruling he had exceeded his executive authority, adding legal uncertainty to the administration’s trade policy.

The emergence of the "TACO" trade underscores ongoing debates about the consistency and economic impact of Trump’s tariff strategy, as well as the unpredictability it injects into global markets.