Donald Trump is clearly seething over the term ‘TACO’ (Trump always chickens out) – a phrase that has characterised financial market trading over the past few months.
It suggests that for all the president’s bluster and threats during his on-off trade war to date, he rarely follows through.
When asked by a reporter about TACO in late May, as his “liberation day” escalation remained on pause, he declared it a “nasty” question and said he wanted negotiations.
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Mr Trump wants a deal but to effectively bully America’s trading partners into agreeing better terms.
It’s a playbook that has defined his time in the White House and, as things stand, more than 20 nations and territories, including Japan and South Korea, face heightened tariffs of up to 40% on their exports to the US from 1 August.
Financial markets don’t really believe it. Stock markets, for example, are still hovering near or at record levels in both the US and in Europe. The FTSE 100 closed above 9,000 points for the first time on Monday evening. TACO is ingrained in those values.
But are markets are in for a shock, especially when it comes to the fight with America’s single largest trading partner, the European Union? It was created, Mr Trump has previously claimed, to “screw” the United States.
It’s fair to say there was great optimism in the EU earlier this month that a deal, similar to that agreed between the US and UK, was looming to avert the worst of a threatened 30% baseline tariff from 1 August.
But the mood music in Brussels changed at the back end of last week and now…
