Geline Salac

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President Donald Trump

Agence France-Presse

<p>WASHINGTON, United States - President Donald Trump made no pretense at hiding his irritation this week when he was asked by a reporter about &quot;TACO&quot; -- an acronym that has been gaining traction among Wall Street traders who believe that &quot;Trump Always Chickens Out.&quot;</p><p>The so-called &quot;TACO Theory&quot; was coined by Robert Armstrong, a Financial Times writer seeking to underline the US president&#x27;s tendency to backtrack on policies when they start to roil the markets.</p><p>Investors have come to realize that the US administration &quot;does not have a very high tolerance for market and economic pressure and will be quick to back off when tariffs cause pain,&quot; the journalist concluded.</p><p>&quot;This is the TACO Theory: Trump Always Chickens Out.&quot;</p><p>Armstrong was writing earlier this month, after stocks had just rebounded sharply on Trump&#x27;s announcement of a pause in massive tariffs imposed on the rest of the world by the Republican leader.</p><p>Worsening the whiplash, Trump announced last week that tariffs of 50 percent on imports from the European Union would come into force on June 1 -- but two days later declared a pause until July 9.</p><div><br/></div><div class="twitter-tweet twitter-tweet-rendered" style="display:flex;max-width:550px;width:100%;margin-top:10px;margin-bottom:10px"><iframe id="twitter-widget-0" scrolling="no" frameBorder="0" allowtransparency="true" allowfullscreen="" title="X Post" src="https://platform.twitter.com/embed/Tweet.html?dnt=false&amp;embedId=twitter-widget-0&amp;features=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%3D%3D&amp;frame=false&amp;hideCard=false&amp;hideThread=false&amp;id=1926331726843818445&amp;lang=en&amp;origin=https%3A%2F%2Fod2-workbench-web.abs-cbn.com%2F%23%2Fworkspace%2Fmonitoring%3Fitem%3Durn%3Anewsml%3Aod2-workbench-api.abs-cbn.com%3A2025-05-30T01%3A26%3A41.564160%3Ab5136ce3-dde3-446e-bdd5-55e1d64cd95e%26action%3Dedit&amp;sessionId=9670894fabc37fcd8e903cd441e9017d45c8aefb&amp;theme=light&amp;widgetsVersion=2615f7e52b7e0%3A1702314776716&amp;width=550px" style="position:absolute;visibility:hidden;width:0px;height:0px;display:block;flex-grow:1" data-tweet-id="1926331726843818445"></iframe></div><blockquote class="twitter-tweet" data-twitter-extracted-i1748568787576602576="true"><p dir="ltr" lang="en">📸President Donald Trump Addresses the West Point Class of 2025 <a href="https://t.co/Sj6Ysx5DIW">pic.twitter.com/Sj6Ysx5DIW</a></p>— The White House (@WhiteHouse) <a href="https://twitter.com/WhiteHouse/status/1926331726843818445?ref_src=twsrc%5Etfw">May 24, 2025</a></blockquote><script async="" src="https://platform.twitter.com/widgets.js" charSet="utf-8"></script><div><br/></div><div><strong>- &#x27;It&#x27;s called negotiation&#x27; -</strong></div><div><br/></div><p>At the heart of Trump&#x27;s flip-flops is an acute sensitivity for the ups and downs of market trading that he honed as a brash New York property developer and business magnate in the 1980s.</p><p>During his first term in office, a sharp reaction on Wall Street could sometimes be the only way to change the billionaire&#x27;s mind.</p><p>Beyond the columns of the Financial Times, the &quot;TACO Theory&quot; is having a viral moment, and has entered the lexicon of investors who see it as more than just a snarky in-joke, according to analysts.</p><p>&quot;TACO trading strategy gets attention again,&quot; blared the headline on a podcast released Monday by John Hardy, head of macroeconomic strategy at Danish investment bank Saxo.</p><p>The phrase eventually found its way back to the 78-year-old president, who furiously denied on Wednesday that he was backing down in the face of stock market turmoil.</p><p>&quot;I chicken out? I&#x27;ve never heard that... don&#x27;t ever say what you said, that&#x27;s a nasty question,&quot; the mercurial tycoon thundered, rounding in the journalist who had asked for his take on the expression.</p><p>Far from caving, Trump said he was merely engaging in the high-stakes cut and thrust of international dealmaking, he snarled -- adding, with a sardonic edge: &quot;It&#x27;s called negotiation.&quot;</p><p>For Steve Sosnick of Interactive Brokers, the TACO Theory is a &quot;nonpolitical way of the markets calling the administration&#x27;s bluff.&quot;</p><div><br/></div><div><strong>- Reaction -</strong></div><div><br/></div><p>Sam Burns, an analyst at Mill Street Research, told AFP he has noticed a new equanimity in Wall Street&#x27;s reaction to each new tariff announcement, with traders&#x27; responses initially &quot;much larger and more direct.&quot;</p><p>Where they once convulsed markets, Trump&#x27;s tariff talk now tends to be viewed as &quot;easily reversible or not reliable,&quot; said Burns, and investors are accordingly more willing to ignore the instinct to act rashly.</p><p>This new calm was evident among traders at the New York Stock Exchange who held steady in the face of Trump&#x27;s EU tariff threats, and again when they did not overreact to successive court rulings blocking and then temporarily reinstating most of the tariffs.</p><p>But Hardy, the Saxo analyst, warns that the vagaries of Trump&#x27;s day-to-day announcements should not distract from the protectionist bent of his broader political outlook.</p><p>&quot;Trump might &#x27;chicken out&#x27; at times,&quot; Hardy wrote in a recent commentary on Saxo&#x27;s website.</p><p>&quot;But the underlying policy moves are for real, and a deadly serious shift in US economic statecraft and industrial policy that is a response to massive instabilities that have been growing for years.&quot;</p><p>rle-tmc/ft/sla</p><p>© Agence France-Presse</p>

<p>President Donald Trump made no pretense at hiding his irritation this week when he was asked by a reporter about "TACO" -- an acronym that has been gaining traction among Wall Street traders who believe that "Trump Always Chickens Out."</p>

President Donald Trump made no pretense at hiding his irritation this week when he was asked by a reporter about "TACO" -- an acronym that has been gaining traction among Wall Street traders who believe that "Trump Always Chickens Out."

A bad wrap: An angry Trump blasts the 'TACO Theory'

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A bad wrap: An angry Trump blasts the 'TACO Theory'

Agence France-Presse

Published May 30, 2025 10:09 AM PHT

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TACO theory

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