Trump Tariff Threats Increasingly Seen as Bluffs, Analysts Say
Officials and analysts believe President Trump's trade threats are often empty, citing retreats on China rare earths, Brazil tariffs, and Iran's Strait of Hormuz stance.
A growing chorus of officials and analysts across multiple capitals view President Trump's tariff and trade threats as largely bluffs that are frequently walked back. The trader refrain "TACO" — Trump Always Chickens Out — has gained traction as recent episodes illustrate the pattern.
Iran refused to reopen the Strait of Hormuz even under what it termed an existential threat, while China leveraged its rare-earth mineral chokehold to force a climbdown. Brazil's President Lula simply ignored a 50% tariff threat.
The pattern suggests that market participants may increasingly discount the follow-through on aggressive trade rhetoric, potentially reducing the impact of future tariff announcements.
Source: First Squawk