How a financial columnist coined 'TACO' to describe Trump's tariffs flip-flops
TACO is short for 'Trump Always Chickens Out'
Wall Street has a new buzzword: TACO. But it's not about food — it's a tongue-in-cheek acronym directed at U.S. President Donald Trump's approach to trade policy.
TACO stands for "Trump Always Chickens Out," a phrase coined by Financial Times columnist Robert Armstrong in a May 2 opinion piece. The term refers to Trump's pattern of announcing steep tariffs only to backpedal in the face of market turmoil.
Most recently, on May 26, Trump postponed a planned 50 per cent tariff on European imports until July. Just two weeks earlier, on May 12, he put a 90-day freeze on proposed 145 per cent tariffs on Chinese goods. Both decisions came in response to sharp market reactions to rising trade tensions.
The term made its way to the White House briefing room this week. During a press event on Wednesday, a reporter asked Trump directly about the TACO label.
"You call that chickening out?" Trump responded. "It's called negotiation."
He added, "Don't ever say what you said. That's a nasty question."
Armstrong spoke with As It Happens host Nil Köksal about how he came up with the term and his thoughts on Trump's response. Here is part of their conversation.
Was this the dream when you came up with "TACO," that it would not only be read around the world, but make it to an Oval Office press conference?
It's not the dream, it's the nightmare. The thing about Trump chickening out is that it's good.
Trump's tariff policies are very bad and destructive, right? When I talk about TACO and Trump chickening out, I'm like, "There's this good thing happening where he doesn't follow through on these bad ideas."
I don't think this is gonna happen, but I have this slight worry that now he knows the phrase, and it's banging around in his head, he'll stop chickening out, which is exactly the outcome I don't want.
How did this phrase "Trump Always Chickens Out" pop into your head?
For the Financial Times, I write this newsletter every day and we were just observing this phenomenon where Trump would make a very loud threat about tariffs, and markets — stock markets, bond markets — would panic and then a day or a week would pass, and Trump would take it back, almost without any prompting whatsoever, and the markets would rebound.
This happened with electronics and it happened with the Liberation Day reciprocal tariffs and it happened recently with the Europe 50 per cent tariff.
So eventually, you're writing about the stuff all the time, and you just need a tagline so you don't have to explain what you're talking about every time.
I was just like trying different things and TACO kind of popped into my mind, possibly because I was hungry, but possibly because it sounds a little bit [like] something like the president would make up himself.
It's the kind of petty jive that he sort of likes, and it also has a slightly Mexican flavour to it, which is very funny in the case of this president who's obsessed with the border.
Trump as you have heard … does not agree. He thinks these threats are a great negotiating tool. He says China and Europe are, [in] his words, begging for a deal. How do you respond?
The first point is, this is a serious enough point. It is a classic principle of negotiation that you go in with a very high ask, and that anchors the conversation at that high number, and so it's easier to come to a compromise that's closer to you, so fair enough, that's part of how you negotiate.
What's weird in Trump's case is that he makes his concessions before the other side has even had a chance to talk, so I don't really understand what the strategy is.
It's like, the least bit of economic or market pressure gets put on him, even before negotiations begin, and he just immediately wilts. What this says to me is, Trump likes tariffs on TV, but in real life, he's not really prepared to sacrifice that much, in terms of popularity, or political capital in order to get these policies through.
His supporters, or certain segments of the population will only hear the first thing he says or see the … poster board he was holding up at that one news conference and whatever happens after that day or after those comments, they will remember that he appeared tough to them.
There's a fantastic irony here, which is politically this made the recent intervention of the courts and blocking him and all the trouble he's having getting these tariffs through might be politically ideal for him in the following sense.
The tariffs, if they'd gone through, in my view, would have been an economic disaster, and it would have been his economic disaster.
If the courts or political opposition or any unknowing journalists or anybody else manages to stop him from doing this stuff, then he gets to say, "I tried to give you these miraculous tariffs, the woke court stopped me, and I'm still your guy."
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Interview produced by Chris Harbord. Q&A edited for length and clarity.