The TACO acronym, coined by Financial Times columnist Robert Armstrong, is a reference to U.S. markets remaining calm in spite of recent turmoil.Mark Schiefelbein/The Associated Press

John Rapley is a contributing columnist for The Globe and Mail. He is an author and academic whose books include Why Empires Fall and Twilight of the Money Gods.

Why did U.S. President Donald Trump raise steel and aluminum tariffs to 50 per cent this week? It may have something to do with a recent interaction that he did not like.

“That’s a nasty question” growled Mr. Trump, clearly rattled by a journalist who asked him if the TACO trade was real. “Don’t ever say what you said.”

TACO: Trump Always Chickens Out. The acronym was coined by the Financial Times columnist Robert Armstrong a few weeks ago and quickly caught on across Wall Street. Mr. Armstrong had come up with the term to account for the surprising calm in U.S. markets amid the turmoil of recent months.

Despite clear evidence that foreigners were inching toward the exits and big fund managers were diversifying out of the United States, the main indexes have remained relatively tranquil. Bond yields have risen, but they haven’t spiked in the way everyone feared after Mr. Trump’s “Liberation Day.” Equally, the U.S. stock market isn’t having a good year, more or less flatlining while those of major competitors, such as Germany, take flight. But nor is it having a bad year.

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