U.S. President Donald Trump may be many things, but he wants the world to know he’s no “chicken” when it comes to fiscal policy, despite what appears to be a tendency to recoil in the face of resistance from economic partners and foes — a behaviour financial analysts have coined “TACO” trade.
The president’s propensity to threaten and then momentarily impose outrageous import taxes on U.S. trade partners, only to retreat when met with retaliation, paved the way for the acronym created by the Financial Times’ Robert Armstrong.
It stands for “Trump Always Chickens Out,” and has come to encapsulate what Trump says is a legitimate form of negotiation. Under conditions created by his erratic manoeuvres, markets tend to sell off when a new tariff threat emerges and then recover after the president backs down.
When asked about the unfavourable phrase during a press conference in the Oval Office on Wednesday, the president appeared offended and rejected the notion that he has made a habit of backing out of deals.
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“You call that chickening out?” Trump said. “It’s called negotiation.”
The author of The Art of the Deal added that he sets a “ridiculous high number and I go down a little bit, you know, a little bit,” doubling down on his position that it’s an effective bargaining strategy.
“Six months ago, this country was stone-cold dead, we had a dead country, we had a country that people didn’t think was going to survive, and you ask a nasty question like that,” he added.
Trump defended his decision to raise tariffs on China to 145 per cent, only to reduce them to 30 per cent for 90 days during negotiations. Similarly, last week, he threatened to impose 50 per cent levies on goods from the European Union as of June — but swiftly delayed the start date until July 9 for negotiations, while the 10 per cent continues.
Trump claims that the EU would not be negotiating if not for his threat of high tariffs.
Similar debacles unfurled over electronics and the universal tariffs that Trump announced on April 2, which were based partially on individual trade deficits with other countries.
President Donald Trump speaks during an event to announce new tariffs in the Rose Garden at the White House on April 2, 2025, in Washington.
Mark Schiefelbein/ Getty Images
His see-sawing antics caused chaos in global stock markets, which have been forced to weather drastically fluctuating conditions.
As of Wednesday afternoon, the S&P 500 stock index was up slightly so far this year. But it was down as much as 15 per cent year over year, a reflection of the volatility that Trump’s changing policies have created.
Trump claims that his global economic policy has created US$14 trillion in new investments in the U.S., a figure that appears to be inflated and is not sufficiently supported by official data.
“We have $14 trillion now invested … when Biden didn’t have practically anything, Biden,” the president said. “This country was dying, you know, we have the hottest country of anywhere in the world, I went to Saudi Arabia, the king told me.
— With files from The Associated Press
© 2025 Global News, a division of Corus Entertainment Inc.
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