Trump Always Chickens Out? Watch how US president reacted to Wall Street's TACO trade jab: ‘Don’t ever…'

TACO or Trump Always Chickens Out. That's what Wall Street has taken to calling United States President Donald Trump's now frequent tariff impositions and subsequent reductions, followed by waivers.

First coined by The Financial Times' Robert Armstrong, the term has been picked up for use by Wall Street traders, who see large sell-offs each time Donald Trump's tariffs are announced, followed by recovery when the demand is cut down or removed, according to reports by AP and Bloomberg.

So, when asked about his thoughts on Wall Street calling his tariffs TACO trade, a visibly offended Donald Trump went on a defensive rant, ending with reprimanding the reporter: “Don't ever say what you said. To me, that's the nastiest question.”

How did Donald Trump Respond?

“Oh, I never heard that... because I reduced China down to a 100, then down to another number, and because i gave the European Union 50 percent tax… You call that chickening out? It's called negotiation. I set a ridiculous high number and I go down a little bit, you know, a little bit,” he told the reporter.

“They wouldn’t be over here today negotiating if I didn’t put a 50 per cent tariff on. The sad thing is, now, when I make a deal with them — it’s something much more reasonable — they’ll say, ‘Oh, he was chicken. He was chicken.’ That’s unbelievable,” Donald Trump said.

How Donald Trump reacted to TACO trade — Watch

Trump tariffs: Why ‘TACO’ Trade?

Over the past few months, Donald Trump has announced tariffs on China, Canada, Mexico, the European Union, steel, autos and electronics around the world — starting off at high numbers, only to retract or reduce the tariff rate subsequently.

For China, tariffs skyrocketed to 145 per cent, tanking stock markets, and after nearly three months of back-and-forth, were cut to 30 per cent. For the EU, he threatened 50 per cent tariffs from June, only to delay the date till July 9 for negotiations, while 10 per cent tariffs continue.

Thus, Wall Street traders who see the markets crash over fears due to impact on businesses and the economy, and then recover after the situation normalises, have adopted the FT's “TACO Trade” terminology to refer to (or mock) Donald Trump's tariffs policy style.

Bloomberg reported that Tom Essaye of the Sevens Report wrote in a note to clients on May 28: “The thesis behind the TACO trade is: Buy the Trump tariff dip. Essentially, Trump has proven to investors that he won’t actually follow through with draconian tariffs. As such, any sell-off following a dramatic tariff threat should be bought.”

(With inputs from Agencies)