Donald Trump carries out only 1 in 4 tariff threats, ‘Taco’ study says
Analysis finds Trump’s tariff threats often go unfulfilled, or retracted, with markets dismissing them as strategic bluster rather than firm policy
In less than three weeks, US President Donald Trump has issued four sweeping tariff threats that, in normal times, would rattle investors, unnerve CEOs and send economists rushing to revise their growth forecasts for the targeted countries.
Instead, financial markets and C-suite executives have mostly shrugged off Trump’s latest warnings involving Iran’s trading partners, Greenland’s supporters, Canada and South Korea, seeing them as merely words intended to gain leverage or change behaviour – nothing he’d actually carry out.
A new Bloomberg Economics analysis challenges the validity of “Taco” or “Trump always chickens out” – the term coined by the Financial Times columnist Robert Armstrong to describe investors selling assets on tariff threats and buying them back when Trump retreats.
In reality, he only follows through about a quarter of the time. About 43 per cent of threats were withdrawn – sometimes with a perceived win declared by Trump – or haven’t been imposed yet.
Nicole Gorton-Caratelli and Chris Kennedy of Bloomberg Economics reviewed 49 tariff threats he made or new trade investigations his administration initiated from the November 2024 election to Sunday – the tally doesn’t include his newest target, South Korea. More than half of the threats haven’t been fully implemented, Bloomberg Economics found.
Most of the 49 announcements that were fully implemented or investigated occurred between February and September. The status of the threats breaks down as follows: