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President Donald Trump pushed back hard Wednesday against the growing perception that he retreats from his own steep tariff threats, denying that he’s “chickening out” and insisting his trade tactics are deliberate negotiating maneuvers designed to pressure foreign governments.
Asked about the so-called “TACO” trade — an acronym coined by Financial Times columnist Robert Armstrong for “Trump Always Chickens Out” — the president lashed out at the reporter.
“Don’t ever say what you said,” Trump responded sharply. “To me, that’s the nastiest question.”
Background
The nickname has gained traction in financial circles as Trump has frequently announced dramatic tariff hikes on imports — only to scale them back amid negotiations. These abrupt pivots have sent U.S. markets into volatility, with investors wary of rising costs and potential trade wars but quick to rebound once threats are paused or reversed.
In recent weeks, Trump has proposed tariffs as high as 145% on Chinese goods, only to delay or reduce them during negotiations. He also threatened a 50% tariff on European Union products, then postponed the increase until July 9, maintaining a baseline 10% tariff in the interim.
These cycles have played out across sectors — including autos, electronics, and broader goods targeted under Trump’s April 2 announcement of universal tariffs pegged to bilateral trade deficits.
Market Reactions and Economic Impact
Each tariff announcement has sent financial markets into tailspins, followed by sharp recoveries. For instance, the S&P 500 fell as much as 15% earlier this year before rebounding as Trump walked back certain measures. As of Wednesday, the index was up slightly for the year.
Trump claimed these tactics have brought results, boasting of “$14 trillion in new investment” into the United States — a figure not verified by independent analysts.
Trump’s Defense and Framing
“You call that chickening out? It’s called negotiation,” Trump said at the White House. “I set a ridiculous high number and I go down a little bit, you know, a little bit, until it becomes reasonable.”
He insisted the European Union would not even be at the negotiating table without his 50% tariff threat. “Usually my problem is I’m too tough,” Trump added.
The president also said that volatility in markets is a “small price” to pay for what he views as larger gains in U.S. economic sovereignty.
Expert and Public Response
Economists remain skeptical of the president’s tariff-first approach. “Tariff threats can give short-term leverage, but repeated reversals undermine credibility,” said Megan Greene, a senior fellow at Harvard’s Kennedy School.
Market analysts have warned that Trump’s methods risk damaging long-term economic relationships while introducing unnecessary uncertainty for businesses.
“Investors are adapting to a world where unpredictability is a constant,” said James Grant, editor of Grant’s Interest Rate Observer. “But no one builds factories or hires workers based on chaos.”
Historical Context
Trump’s approach to trade policy has remained largely consistent since 2016 — favoring bilateral deals, aggressive rhetoric, and tariffs as both punishment and bargaining chips. While President Joe Biden rolled back some Trump-era policies, the underlying scrutiny of global supply chains and China remains bipartisan.
However, analysts note Trump’s escalatory style often deviates from traditional diplomatic negotiation, relying more on shock value than structured talks.
Next Steps
With the July 9 EU tariff deadline looming and talks with China ongoing, the international business community is bracing for more market tremors. Trump has not ruled out reinstating higher rates if he sees negotiations stall.
Despite criticism, Trump appears committed to his method. “I negotiate tough,” he said. “That’s how you get deals.”
