Trump Always Chickens Out – or Taco for short. Investors like narratives to explain the financial world, and they appear to have seized on this one: whenever Donald Trump faces a market backlash, he will back down.
It would be fair to say the US president did not take kindly to the suggestion that he was being a “chicken” when asked by a reporter at the White House about the term that is gaining traction on Wall Street.
“Oh isn’t that nice – ‘I chicken out.’ I’ve never heard that,” Trump mused on Wednesday in response to the reporter’s question on the so-called Taco trade. He then launched into extended comments on how high the tariffs he imposed on China were, and how he had “helped” China by cutting them.
“But don’t ever say what you said,” he added to the reporter. “That’s a nasty question.” Apparently riled, he later returned to the theme, insisting that he was no chicken, and that often people accused him of being too tough.
But recurrent retreats by Trump have become the basis for stock markets rebounding after falls, even as the US president has raised tariffs to their highest level in more than a century.
The S&P 500, the US stock market benchmark, has gained about 1% during 2025, despite a deep slump in April as Trump announced “liberation day” tariffs on trade with most countries in the world.
The stock market rise appears to have been aided by the Taco trade narrative: that market turmoil will correct the president’s course and allow companies to keep on making strong profits. That belief will strengthen if courts uphold Wednesday night’s ruling by New York’s court of international trade that Trump’s tariffs have been imposed illegally.
