A Quick Primer on the Trump TACO Trade and the Economic Danger It Presents Now

By Jacob Weindling  |  June 2, 2025 | 3:47pm
Photo by The White House
Economy Trade War
A Quick Primer on the Trump TACO Trade and the Economic Danger It Presents Now

I and everyone else on the trade war beat have been documenting this phenomenon week-in and week-out since Trump’s liberation day tariff announcement, but now the markets have a well-publicized name for it. A Financial Times columnist coined the term the Trump Always Chickens Out (TACO) back on May 2nd, and Trump was recently asked about Wall Street adopting this trade over the past bullish month. He responded the way you would imagine, telling the reporter, “Don’t ever say what you said. That’s a nasty question.”

After another chaotic week where nobody knows anything about Trump’s tariffs, Trump posted a totally believable explanation about why he definitely caved in China’s best interests to be “MR. NICE GUY!” This totally happened and this most recent iteration of the TACO trade certainly wasn’t due to America’s emptying ports or the ongoing turmoil in the bond market, and the fake news media again is making MR. NICE GUY out to be the bad guy. It was a nasty question and you definitely can’t plot out Trump’s caves on the chart of the 30-year Treasury yield every time it approaches a certain magic number!

5% on the 20 and 30 years is the most important number in the world

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— Jacob Weindling (@jakeweindling.bsky.social) June 2, 2025 at 1:27 PM

Trump Always Chickens Out because the Illuminati are real and they get very upset when long-term bond yields creep over five percent. That’s basically most of the TACO trade, just watch the long end of the yield curve and based on how close it is to five percent, you’ll get a sense for how many more days Trump is going to pretend to be Mr. Tough guy. I’m sure today’s new promise to have all his trade deals resolved in a little less than five weeks will come through just like all the previous promises of impending trade deals “last week” according to some of Trump’s most slavishly devoted cable news mouthpieces.

The danger with the TACO trade is that Trump knows about it now and it clearly gets alllllll the way under his skin. He knows he has the “explode the global economy” button sitting in his office because the bond market consistently tells him he does, and if he grows resentful enough of the fact that Trump Always Chickens Out, as Lehman Brothers demonstrated earlier this century, it just takes one key time that he doesn’t chicken out for a lot of really bad things to unfold.

 
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