Wall Street was right about the president: Trump Always Chickens Out.
Despite spending weeks fuming about the fact that investors had clocked him for repeatedly reneging on his tariff plan, Donald Trump has once again decided to extend the deadline to implement them.
The White House said Thursday that the deadline for countries to strike trade deals with the U.S. may be extended past July 9, a deadline that press secretary Karoline Leavitt described as “not critical.”
“The president can simply provide these countries with a deal if they refuse to make us one by the deadline,” Leavitt said during a press briefing. “And that means the president can pick a reciprocal tariff rate that he believes is advantageous for the United States and for the American worker.”
Ultimately, it’s a “decision for the president to make,” Leavitt noted.
The TACO theory was coined in early May by Financial Times columnist Robert Armstrong, who added a catchy acronym to the practice of loading up on stocks when Trump first announces the tariffs, and then selling when he ultimately backtracks on enforcing them.
So far, that’s been true for enacting additional tariffs on Mexico and Canada, postponing his “reciprocal” tariff plan on dozens of countries after his April “Liberation Day” announcement went south, delaying a tariff on imports from the European Union, and smashing his plan to fine China, decreasing tariffs on Chinese products to 55 percent from 145 percent.
At the end of last month, Trump threatened to impose a 50 percent tariff on the European Union but quickly delayed the penalty to July after European Commission President Ursula von der Leyen agreed to negotiate.
The extension for implementing practically all of Trump’s “reciprocal” tariffs, however, is set to expire July 8.
Trump’s tariff proposals haven’t won the U.S. too much negotiating ground. Instead, countries around the world began observing that—rather than playing the waiting game to meet with the White House over potential trade relief—China’s tough negotiating strategy with the former real estate mogul had actually gotten the Eastern powerhouse a significantly better deal.
In the end, it will be America which pays the price when the Trump administration runs out of time on its “90 deals in 90 days” promise. On Tuesday, Federal Reserve Chair Jerome Powell said that the central bank would wait to see the residual impacts of the country’s new tariff plan before reducing its key interest rate, as companies have already decided to increase product prices this year in reaction to hampered global supply chains.
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