By Dan Merica, Matthew Choi — It may be TACO Tuesday, but we aren’t sure President Donald Trump is eager to pass the queso.
TACO – or “Trump Always Chickens Out” – is a Wall Street acronym that suggests that the president often talks tough on tariffs but ultimately backs down. The term, coined by Financial Times columnist Robert Armstrong, highlights how Wall Street, which Trump has long seen as a leading market indicator, has learned to ignore the president’s talk and focus on his actions after the president paused his harshest tariffs following the stock market’s plummet in April.
“He does check the score board, and the score board is the stock market,” said Michael Batnick, a managing partner at Ritholtz Wealth Management and one of the hosts of “The Compound,” a YouTube show and podcast on business and investing. He noted that Trump’s announcement Friday that he would double U.S. tariffs on European steel to 50 percent corresponded with a markedly quiet day of trading. “He ran out of juice,” Batnick said. “He made that announcement and nobody cared, like it was a child having a tantrum and people said, ‘Leave him in the corner, he will stop crying.’ ”
Trump lashed out about the idea last week, dismissing it by saying his walk-backs on tariffs were strategic and attacking the reporter who asked about it.
“I chicken out, oh, I have never heard that,” he said, before turning his fire on the reporter. “You ask a nasty question like that? … Don’t ever say what you said. That is a nasty question.”
White House spokesperson Kush Desai attacked The Washington Post for covering TACO, labeling them “asinine memes.”
“The only guiding factor behind the Trump administration’s trade and economic policies is the best interest of the American people,” Desai said.
And Treasury Secretary Scott Bessentheralded Trump’s lack of predictability last week, telling reporters that he calls it “strategic uncertainty in the negotiations.”
But Batnick said traders have been using a theory like this for weeks, whether they called it TACO or not.
“For the entirety of the V-shaped recovery that we have experienced since the bottom on April 9, traders and investors are looking past the noise and they got it right,” Batnick said. “The market got it right and not just the stock market, the bond market got it right. … They called his bluff and forced his hand.”
TACOcould damage Trump on multiple fronts.
Politically, it highlights thateconomic authorities flatly don’t believe that Trump will follow through on his tough talk, especially if it impacts thestock market. And while his tariffs have caused uncertainty, they make Trump’s decisions look less strategic and more like bluster.
Personally, it must sting. Trump built his political career on being a businessman, someone who understood that world better than past presidents. He was effectively introduced to the broader American electorate on NBC’s “The Apprentice,” a show that went to great lengths to tout his business bona fides.
“I don’t think there is an adoration of his business abilities, but, generally speaking, the investor class likes that he is there, would prefer if he did less,” said Josh Brown, CEO of Ritholtz Wealth Management and a host of “The Compound.” “Everyone that I talk to says, ‘Can this guy just go f—ing play golf?’ They like his policies, as far as deregulation, they would like for the tax cuts to be extended, I just think they would like there to be less news every day.”
Democratic operatives in Washington have privately discussed how to use the theory against the president, while party leaders have branded him “President TACO.” “It’s raining tacos today,” California Gov. Gavin Newsom (D) said on his podcast last week.
Traders like Batnick and Brown don’t think the theory or public mocking will change Trump.
“He’s 78 years old. Does a leopard change its spots?” Brown asked. “He has strong beliefs about tariffs, I think he likes when his pronouncements make the news and I think he likes the idea that the markets will see past the tariffs because his Big Beautiful Bill is coming and the economy is doing okay.”
Brown added: “The Wall Street consensus is that the tariffs will get swallowed up inside of corporate margins and a little bit of higher prices for consumers. And that seems to be playing out. And so far, investors are just weathering it.”
