The stock market in 2025 is being ruled by a new meme, and it’s not about food—it’s about finance, politics, and the unpredictable nature of Donald Trump’s trade policies. The “TACO trade,” shorthand for “Trump Always Chickens Out,” has become Wall Street’s latest playbook, offering traders a tongue-in-cheek but surprisingly effective strategy for navigating the turbulence of Trump-era tariffs. As of this week, the TACO trade is dominating financial headlines, with investors riding out tariff threats and profiting from the president’s repeated retreats.
The TACO Trade: Real-Time News and Latest Developments
Just days ago, President Trump threatened to slap a 50% tariff on European Union imports, sending shockwaves through global markets. Stocks tumbled in response, continuing the familiar pattern that has defined much of 2025. But in true TACO trade fashion, Trump reversed course after a weekend call with EU leaders, announcing a delay on the tariffs until July 9. The result? A sharp rebound in the S&P 500, which surged nearly 2% as traders returned from the Memorial Day holiday. This isn’t an isolated event—similar swings have played out repeatedly this year, with Trump’s tariff threats causing temporary market dips, only for him to “chicken out” and set off a rally when he softens or delays the measures.
Wall Street insiders, retail traders, and meme-makers alike have embraced the TACO trade as the new Trump trade, a term that once described the market’s bullish response to Trump’s pro-business agenda. Now, the focus has shifted: instead of betting on deregulation or tax cuts, investors are watching for tariff threats and preparing to buy the dip when Trump inevitably backs down.
What Is the TACO Trade? The Meme Explained
The TACO trade isn’t just a joke—it’s a market phenomenon with real consequences. Coined by Financial Times columnist Robert Armstrong, TACO stands for “Trump Always Chickens Out.” The term captures a pattern that’s become all too familiar: Trump announces aggressive new tariffs, markets panic and drop, then he retreats or delays, and stocks rally back.
Here’s how the TACO trade typically plays out:
- Trump makes a dramatic tariff announcement (e.g., “Liberation Day” tariffs, 50% tariffs on EU goods, or triple-digit tariffs on China).
- The stock market reacts with an immediate sell-off, reflecting fears of an escalating trade war.
- Days or weeks later, Trump announces a pause, reduction, or delay, often after diplomatic talks or market backlash.
- Stocks surge as investors rush to buy the dip, anticipating that the worst-case scenario won’t materialize.
The TACO trade has become so entrenched that it’s now a staple of trading floor banter, financial news coverage, and social media memes. Wall Street traders openly discuss “waiting for the reversal,” treating Trump’s tariff threats as a tell in a high-stakes poker game.
Why the TACO Trade Matters for Investors
The TACO trade isn’t just a meme—it’s a strategy that’s influencing billions of dollars in market activity. Investors have learned to take Trump’s threats with a grain of salt (and, as some joke, a bit of salsa), betting that he’ll prioritize market stability over following through on the harshest measures.
This approach has led to:
- Historic levels of dip-buying: Retail and institutional investors are increasingly willing to buy stocks when they drop on tariff news, confident that a reversal is likely.
- Reduced fear of tariff-induced crashes: With the TACO trade in mind, many traders believe that tariff-related declines will be short-lived, making them less likely to panic-sell.
- A new lens for market analysis: Analysts now frame tariff news in terms of the TACO trade, advising clients to “buy the Trump tariff dip” and cautioning against overreacting to initial threats.
But the strategy isn’t without risks. If Trump ever decides not to “chicken out,” or if negotiations break down and tariffs remain in place, the market could face a more serious downturn. For now, though, the TACO trade remains the dominant narrative.
How the TACO Trade Is Playing Out in 2025
Let’s look at some recent examples that have cemented the TACO trade’s reputation:
| Date | Tariff Threat | Market Reaction | Trump’s Reversal | Market Rebound |
|---|---|---|---|---|
| April 2 | “Liberation Day” tariffs | S&P 500 drops 12% | 90-day pause announced | Best S&P day in 20 yrs |
| May 12 | 145% tariffs on China | Market jitters | Lowered to 30% after talks | Stocks recover losses |
| May 26 | 50% tariffs on EU goods | Sharp sell-off | Delay to July 9 announced | S&P 500 up 2% |
These events show the TACO trade in action: threat, panic, retreat, rally. Each time, investors who bought the dip have been rewarded, reinforcing the meme’s staying power.
The Internet Reacts: TACO Trump Goes Viral
The TACO trade isn’t just a Wall Street phenomenon—it’s a social media sensation. Memes, GIFs, and jokes about “TACO Trump” flood platforms like Reddit and X (formerly Twitter) every time a new tariff threat emerges. Some posts poke fun at “tacoflation” and the prospect of $10 tacos if food imports are targeted, while others lampoon Trump’s negotiating style.
Even President Trump himself has been asked about the TACO trade. When confronted by a reporter, he dismissed the idea that he “chickens out,” insisting, “It’s called negotiation.” Still, the pattern is hard to deny, and the meme shows no sign of fading.
What’s Next for the TACO Trade and Wall Street?
As the summer approaches and the July 9 tariff deadline looms, investors are watching closely. Will Trump stick to his pattern and delay or soften the tariffs again? Or will he surprise the market by following through, breaking the TACO trade cycle?
For now, most analysts expect the TACO trade to remain a reliable guide—at least until proven otherwise. The strategy of “buying the Trump tariff dip” has worked repeatedly, but the risk of a more damaging downturn remains if negotiations fail or Trump changes tactics.
Key takeaways for investors:
- Don’t overreact to initial tariff threats; history suggests a reversal is likely.
- Watch for signs of genuine policy shifts—if Trump doesn’t back down, the TACO trade could unravel.
- Stay nimble and be prepared for volatility, as the market remains sensitive to every tweet and announcement.
Conclusion: The TACO Trade Is Here to Stay—For Now
The TACO trade has captured Wall Street’s imagination, offering a blueprint for navigating the chaos of Trump’s tariff policies. It’s a rare example of a meme that’s both funny and financially meaningful, shaping real investment decisions and market outcomes. Whether you’re a seasoned trader or a casual observer, understanding the TACO trade is essential for making sense of the stock market in 2025.
As long as Trump’s pattern of threats and retreats continues, the TACO trade will remain a powerful force. But savvy investors know that even the best memes have a shelf life—so keep your eyes on the headlines, your finger on the buy button, and your tacos close at hand.
Ready to ride the next TACO trade? Stay informed, stay nimble, and don’t let the memes outsmart you. Subscribe to our newsletter for real-time market insights and analysis.