Donald Trump has reacted furiously to a theory, currently gaining traction on Wall Street, that he “always chickens out”.
Donald Trump has reacted furiously to a theory, currently gaining traction on Wall Street, that he “always chickens out” instead of following through on his threats to impose tariffs.
Mr Trump took questions from reporters during an event at the White House today, where his selection to be the interim United States Attorney for the District of Columbia, Fox News host Jeanine Pirro, was sworn in.
One question in particular, from CNBC journalist Megan Casella, displeased him.
She brought up a term first coined by Financial Times columnist Robert Armstrong, which has reportedly taken hold among traders on Wall Street.
“The recent rally has a lot to do with markets realising that the US administration does not have a very high tolerance for market and economic pressure, and will be quick to back off when tariffs cause pain,” Mr Armstrong wrote on May 2.
“This is the TACO Theory: Trump Always Chickens Out.”
The idea here is that the markets have taken note of Mr Trump’s constant vacillation on his tariff policies. The President has repeatedly announced severe and sweeping tariffs, only to back away from them after the inevitable financial hyperventilation, usually by lowering the tariff rate or by agreeing to large carve-outs for affected industries.
Mr Trump argues that is a negotiating tactic. Wall Street, however, appears to be coming around to the view that it is weakness; that when confronted by a tanking stock market, Mr Trump tends to lose his nerve.
That has implications for Mr Trump’s negotiating strategy going forward. Threats only work, of course, if their target believes they are credible. If other countries follow Wall Street’s lead, concluding Mr Trump is brittle and easy to scare into backing down, his threats inevitably become much less effective.
Mr Trump seemed to sense that when Ms Casella brought up the “TACO” theory today. He was quick to reject it.
“Mr President, Wall Street analysts have coined a new term called ‘TACO trade’. They are saying Trump always chickens out on your tariff threats. And that’s why markets are higher this week. What’s your response to that?” she asked.
“You mean because I reduced China from (a tariff rate of) 145 per cent, that I set down to 100 per cent, and then down to another number?” Mr Trump responded.
“And I said, ‘You have to open up your whole country.’ And because I gave the European Union a 50 per cent tax tariff? And they called up and they said, ‘Please, let’s meet right now please. Let’s meet right now.’ And I said, ‘OK, I’ll give you until June 9.’ I actually asked them, I said, ‘What’s the date?’ Because they weren’t willing to meet. And after I did what I did, they said, ‘We’ll meet any time you want. And we have an end date of July 9.’
“You call that chickening out? Because we have $14 trillion now invested, committed to investing when Biden didn’t have practically anything.”
US President Donald Trump. Picture: Jim Watson/AFP
Mr Trump gave two different dates for the European Union’s deadline to reach some sort of trade agreement. The actual date is July 9.
Last month, the US President announced a 20 per cent tariff on most goods from the EU, before lowering it to 10 per cent, pending a deadline for trade negotiations on July 8. Then, last week, he announced it would rise to 50 per cent, due to his frustration at the pace of those trade talks.
That 50 per cent rate was set to take effect on June 1, before Mr Trump had a phone call with European Commission President Ursula von der Leyen, which he described as “very nice”. So now we have the July 9 deadline.
That all sounds quite convoluted. We’re back where we started, essentially, with Mr Trump’s original deadline shifted back by one day.
For what it’s worth, the “$14 trillion now invested” figure Mr Trump cited appears to have been plucked out of thin air. Here’s a fact check from ten days ago, when his chosen number was fluctuating between $US6 and $US10 trillion.
Anyway Mr Trump ended his answer with a potshot at Ms Casella.
“Six months ago, this county was stone cold dead. We had a dead country. We had a country – people didn’t think it was going to survive,” he said.
“And you ask a nasty question like that. It’s called negotiation. Don’t ever say what you said. That’s a nasty question.
“To me, that’s the nastiest question.”
Ms Casella was asked about the exchange on air a short time later.
“You might have heard the term ‘TACO trade’, Trump Always Chickens Out. That is what some analysts, some commentators have been using to talk about this,” she said.
“So I asked the President directly, what’s his response to that, and he had a long answer.”
She noted, wryly, that Mr Trump “did not like this question”, but did nevertheless give an illuminating answer on “whether he’s bluffing too much and it’s hard to take seriously now on the global stage”.
Megan Casella, the reporter who asked the question, recounting the exchange on CNBC.
“Wall Street loves an acronym, and the idea here is just, yes, the markets will go down when he makes a threat only to rebound, often higher, once the threat is back off the table,” said Ms Casella.
“And so far, where we are in sort of this tariff limbo right now, many of, if not most of the tariff threats that have been levelled so far are not yet in effect.
“That could be a different story six months from now. But the question now being: will other countries still take him seriously and come to the negotiating table if this pattern continues?”
“I hear he called that a ‘nasty question’, Megan,” anchor Kelly Evans said.
“He sure did. A badge of honour, I guess,” Ms Casella quipped.
US politics live: Russia hits back at Trump’s Putin jab
The Kremlin has hit back at Donald Trump’s declaration that Russian dictator Vladimir Putin is “crazy”.
The Pentagon has released a blockbuster advertisement declaring an end to ‘wokeness’ in the military and reminding America’s enemies of its new global agenda.
Narrated by President Donald Trump and his troubled Defence Secretary Pete Hegseth, the 90-second clip features action-packed vision and soaring music.
Conservative news outlets praised the ad, which rolled out on social media earlier today.
Meanwhile, a US firm with close ties to Mr Trump is preparing to make a major move on Darwin Port, seizing control from a Chinese billionaire linked to the Communist Party.
Prime Minister Anthony Albanese wants the key strategic asset to be sold, otherwise he has threatened to take back its ownership.
Elsewhere, European stock markets rallied on Monday after Mr Trump delayed 50 per cent tariffs on the European Union until July 9 to give more time for negotiations.
Trump sent the markets into a tailspin again late last week when he threatened to hit EU goods with the huge levy from June 1 as talks were “going nowhere”.
Russia’s ‘emotional’ jab at Trump
The Kremlin has hit back at Donald Trump’s declaration Russian dictator Valdimir Putin is “crazy” by declaring the US president showing signs of “emotional overload”.
The tit-for-tat follows Mr Trump’s fiery reaction to Russian airstrikes on a series of targets in Ukraine over the weekend, killing at least 29 people and injuring scores more.
It marked the largest aerial assault on Ukraine since Putin’s invasion three years ago.
On his Truth social network, Mr Trump yesterday the Russian leader had “gone absolutely CRAZY”.
“I’ve always had a very good relationship with Vladimir Putin of Russia, but something has happened to him,” he wrote.
“He is needlessly killing a lot of people, and I’m not just talking about soldiers. Missiles and drones are being shot into Cities (sic) in Ukraine, for no reason whatsoever.”
Later, he doubled down, writing: “I don’t know what the hell happened to Putin.”
A Kremlin spokesperson later said: “”his is a very important moment, which is associated with the emotional overload of absolutely everyone and with emotional reactions.”
He added that Russia is “very grateful” to America for attempting to negotiate an end to the conflict.
Charles to make ‘significant’ remarks
King Charles is widely tipped to drop something of a bomb – at least in a typically gentle and measured royal way – on Donald Trump when he delivers a “significant” speech in Canada.
The monarch is in the Commonwealth nation, where he is the head of state, with wife Queen Camila for their first visit since he ascended to the throne.
On Tuesday, local time, King Charles will deliver an address to Canada’s parliament to mark its commencement, during which he will reportedly avow his support for the nation in its bitter dispute with the US president.
Mr Trump has repeatedly attacked America’s northern neighbour, declaring his intention to make it a new US state, sparking a cultural and trade war between the usually friendly countries.
The BBC noted the King’s visit to parliament – the first time in five decades a monarch has delivered the commencement speech, which is usually given by the governor-general – is hugely symbolic.
“The King’s speech will be written on the advice of the Canadian government, with the expectation that it will send a clear, if diplomatic, message that the country is ‘not for sale’ to the US,” it reported.
“Carney said in advance that the speech, to be delivered in French and English, would match ‘the weight of our times’.”
Democrats facing ‘huge trouble’ in 2028
The Democratic Party is in “huge trouble” unless it urgently reverses its electoral fortunes, a former top adviser to Barack Obama has warned.
Daniel Pfeiffer, who was a strategists for the former president, said his party had “no path” to the White House if it didn’t address the mass exodus of Latino voters seen in 2024.
“There’s no way to look at this without recognising the massive scale of our problems,” Mr Pfieffer said in an interview with the Pod Save America podcast.
“You can kind of tell yourself that things might be kind of OK by looking at just the shift from 2020 to 24, but if you really want to assess where we are as a party, you have to look at the shift from 2016 to 2024.”
When it comes to support from Hispanic voters, Hillary Clinton drastically outshone Donald Trump back in 2016 by 70 percentage points.
In stark contrast, Mr Trump last year enjoyed stronger support and won a more dominate share of the male Latino vote against Kamala Harris.
That matters because Latinos are the fastest-growing population demographic in the United States and are especially significant in states like Arizona, Texas, Florida and Nevada, Mr Pfieffer explained.
“It’s not all about men,” Mr Pfieffer said.
“Latinos moved 17 points [to the right] in eight years. Latino men went 14 points [toward Republicans] in eight years.
“They are becoming more of the electorate, and we are losing more of them at a very fast rate. If that trend continues, there is no path to Democrats winning elections.”
“The message I take from this is, anyone who thinks that we can get away with just tinkering around the edges, just hoping that Donald Trump becomes unpopular or they nominate some yahoo in 2028 or we’re going to ride the wave of tariffs and inflation to a narrow House victory is just rearranging the deck chairs on the Titanic.
“We have to be willing to ask very hard questions.”
Trump’s bizarre ‘scum’ rant
It’s Memorial Day in America, so naturally Donald Trump has taken the opportunity to attack his “scum” opponents.
The president took to his Truth social media network to commemorate the hallowed day, which pays tribute to Americans who have died fighting in all wars.
The message, written in all caps, took aim at his political enemies, including former president Joe Biden, who he described as “incompetent”.
Mr Trump accused his predecessor of allowing 21 million migrants to “illegally enter our country, many of them being criminals and the mentally insane”.
And he took aim at “USA hating judges” who have blocked his administration’s controversial deportation orders.
Here’s the bizarre rant in full.
Fresh call for new US envoy after latest Trump tariff threat
A prominent Coalition MP has called for a switch of Australia’s most important envoy after Donald Trump’s latest tariff threat.
Barnaby Joyce has renewed his call for a new Australian ambassador in Washington after Donald Trump pledged to hike blanket tariffs on steel and aluminium to 50 per cent.
The Coalition attack dog said on Monday that Australia’s continued failure to secure a carve out came down to Kevin Rudd, who has been Canberra’s envoy to the US since 2023.
Mr Rudd, a former Labor prime minister, has been highly critical of the US President over the years, calling Mr Trump a “village idiot”, “nuts”, the “most destructive president in history” and a “traitor to the West”.
Meanwhile, Mr Trump has called Mr Rudd “nasty” and “not the brightest bulb”.
Mr Joyce argued that while Mr Rudd was a “good guy”, he was not right for the job.
Nationals MP Barnaby Joyce has called for a new Australian ambassador to the US. Picture: NewsWire / Martin Ollman
“Kevin Rudd is a good guy but he’s not kicking a goal in the United States,” the Nationals MP told Seven’s Sunrise.
“There is a difference in the relationship between him and the Trump administration.
“I believe the first thing you have to do is give Kevin another job somewhere else – get an ambassador who actually can work closer with the United States.
“You can’t have the Australian ambassador unable to make the connections at the highest level of the United States.”
Asked if Mr Rudd alone was the weak link, Mr Joyce said he thought “we can do better for the United States”.
“I’m not saying he’s a bad ambassador, but he’s not suited for the United States,” he said, adding it was “quite apparent” Mr Rudd was “just not hitting it off” with Mr Trump.
Australian ambassador to the US Kevin Rudd has been praised for his performance as Canberra’s envoy in Washington. Picture: NewsWire / Martin Ollman
Only the UK has managed to receive an exemption from the Trump administration’s tariffs.
But analysts have questioned the merits of the deal, as London was forced to give US companies greater access to other parts of the British economy to lock it in.
Mr Rudd has the firm backing of Labor, with the Albanese government crediting him with much of the diplomatic legwork around AUKUS.
Retired Liberal Party old guard have also continued to stand by the ambassador, including past political rivals.
Appearing opposite Mr Joyce, Social Services Minister Tanya Plibersek came to Mr Rudd’s defence.
“Kevin has had an extraordinarily active time as ambassador,” she said.
“He’s got excellent relationships with both Republicans and Democrats.”
Ms Plibersek went on to praise Mr Rudd as “hardworking” and as having “enormous capacity”.
“He’s an excellent ambassador, and at the end of the day, Australia chooses our ambassadors,” she said.
“We don’t allow other countries to choose our ambassadors for us.”
US President Donald Trump has pledged to hike blanket tariffs on steel and aluminium to 50 per cent. Picture: Jim Watson / AFP
Mr Trump over the weekend declared on social media that it was his “great honor to raise the tariffs on steel and aluminium from 25% to 50%, effective Wednesday, June 4th”.
“Our steel and aluminium industries are coming back like never before,” he posted.
“This will be yet another BIG jolt of great news for our wonderful steel and aluminium workers. MAKE AMERICA GREAT AGAIN!”
Australian Trade Minister Don Farrell blasted the tariffs as “unjustified and not the act of a friend”.
“They are an act of economic self-harm that will only hurt consumers and businesses who rely on free and fair trade,” he said in a statement on Saturday.
“We will continue to engage and advocate strongly for the removal of the tariffs.”
Mr Farrell said last month a deal was before the Trump administration and the ball was in the US’ court.
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