The TACO Trade Strikes Again? Analysts Weigh In

Trump’s recent reversal of a post that threatened 100% tariffs on China, prompted by the nation’s new rare‑earth export controls, has analysts speculating about a possible TACO move in the financial markets. Some have compared the action to past tariff moves orchestrated by Trump.

Analysts State TACO Trade Is Back After China’s Tariffs Apparent Reversal

President Trump’s recent moves regarding the rise of export controls on rare earths imposed by China have analysts puzzled about the real reason behind two posts that seem completely opposed, hinting at the possibility of a TACO trade return.

The TACO (Trump Always Chickens Out) trade, a term coined earlier by Financial Times journalist Robert Armstrong, described the moves made by Trump when the tariff war started, as he announced heavy levies and walked back from them.

This realization allowed market actors to bet against the measures’ permanence and take advantage. Even Trump referred to it, stating that he was considered “too tough” sometimes, and stressed that the announcements were part of ongoing negotiations, which some on social media refer to as the “art of the deal.”

Peter Schiff, a known financial strategist and gold aficionado, referred to Trump’s alleged bluff. He stated:

TACO strikes again. JD Vance walked back Trump’s 100% tariffs threat by saying it’s just a negotiating tactic. It’s not the best negotiation strategy to let your opponent know that you’re bluffing. Trump also posted about his great relationship with China’s wonderful president.

Trump’s China tariff threat post is considered the main cause of a financial market pullback and a disaster in crypto trading markets, which left billions in losses for traders who did not account for the black swan event.

Nonetheless, others believe that Trump’s knee-jerk reaction has to do with China’s leverage of rare earth to achieve other objectives. A spokesperson for the Chinese Ministry of Finance highlighted that tariff threats were “not the right way to get along with China,” and concluded that while China does not wish a tariff war, it is not afraid of waging one.