By John Q. Hosedrinker 
President Trump’s reversal on tariffs against European allies sparked an international asset rally, reigniting investor confidence and the “TACO” trade, which refers to Trump’s tendency to back down from aggressive trade threats. This “Trump Always Chickens Out” phenomenon was coined after the initial shock of tariff announcements in April 2025, when markets initially reacted negatively but later recovered as Trump eased or cancelled the tariffs. Despite the positive market response, some analysts suggest a cautious approach, as lingering concerns about the Greenland deal and Europe’s response remain. While the market’s initial negative reactions have become more muted, the long-term impact of these policy shifts remains uncertain.
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Trump’s latest tariffs U-turn is sparking a global market rally — and reviving talk of the ‘TACO trade’
It seems like we’re watching a familiar dance again. The recent U-turn on tariffs by Trump has sent markets soaring, and it’s hard not to notice the pattern. It’s almost like a script has been written, one where the main character, let’s call him “TACO Donny,” whips up a frenzy, and then, at the last minute, everything is alright again. This “TACO trade,” as some are calling it, involves a predictable cycle of threats, market dips, and subsequent rallies, all seemingly orchestrated for someone’s financial gain. And it’s not exactly subtle, is it?
The whole situation does feel a bit like a sophisticated con. There are whispers of market manipulation schemes, with fortunes being made while the average person is left wondering what just happened. The news cycle conveniently overlooks certain things, like the ongoing silence surrounding the Epstein files, while the markets react with a predictable pattern. It feels like this is more than just coincidence. Could it be that threats against allies are tools of market manipulation? The pattern, though, is undeniable: a market panic followed by a carefully orchestrated “rescue.”
The reaction to the whole situation raises a lot of questions. It’s almost like the markets themselves are detached from any grounded reality, driven by emotion and the whims of a few. The way markets seem to respond to Trump’s actions is baffling, given the consequences. If any other leader were to behave in a similar way, there’d be an uproar, but with Trump, there’s always the chance for a rebound.
And that’s the thing, the “Taco trade”. The pattern plays out like this: first, there’s the bluster, the threats of tariffs, or the surprising Greenland claims that drive uncertainty. Then, the market reacts, dips lower, and opportunities arise for those in the know to make a quick buck. Finally, the turnaround, the U-turn on tariffs, and the markets rejoice. It’s like watching a toddler with a remote control, hitting buttons just to see what happens.
Now, everyone knows there’s a pattern, which makes the whole thing even more troubling. It’s like he’s trolling the markets, and making his friends rich while everyone else just watches the numbers go up and down. This raises the question of whether this is a deliberate strategy, with the manipulation being the real game. And the most frustrating part? It’s so painfully obvious.
The real key to understanding all of this is understanding the nature of Trump’s actions. He seems to have a belief system that operates in the moment. First, he seeks affirmation, then uses the situation for power and control. Consistency is weakness and flexibility is strength. He announces something with complete conviction, and it’s reversed the moment it stops serving him. It’s a dangerous game.
The mechanics of this trading pattern, often referred to as the TACO trade, are almost like clockwork. First, there’s the initial announcement, the tariff threats, which causes initial market concern. Then, the pressure builds over the weekend, when Trump doubles down on the threats and the markets are closed. The next step is a negative reaction when markets open, with a sell-off as uncertainty rises. Dip buyers then begin to step in, leading to a relief rally that quickly fades. Then comes the turnaround. Discussions begin, leading to a deal announcement and new market highs. Rinse and repeat.
And of course, we can’t ignore the elephant in the room: the possibility of insider trading, with those close to Trump knowing how the game is played. There are whispers of people selling stock before the dip and buying it back after. It is clear that the market is currently a playground for a few. This whole charade is something to be watched out for, considering it is likely to be repeated time and time again.
Investors need stability and trust. However, at the end of the day, investors may see this as an opportunity, with the predictable cycle and the market’s response providing an opportunity to profit, and some are definitely doing just that. Despite the overall market trends, some are making money on the predictable cycles. The problem is understanding where to start, and when to get out.