If you find the market fluctuating wildly, shouting about a crash one moment and then fully rebounding the next, doesn't it feel like something is off? Is this really a strategy of a 'negotiation expert', or is it a ticking time bomb tied to the capital market? The so-called TACO trade — Trump Always Chickens Out, do you really believe this is backing down, or is he playing a big game?

In today's global market where everyone is on edge, former U.S. President Trump once again single-handedly ignited a 'tariff storm'. Facing criticism for his frequent tariff threats and subsequent 'retraction', he not only denied backing down but also defended himself loudly: 'This is called negotiation!'


This is what is widely mocked as 'TACO trade', a strategy label that is not delicious but extremely dramatic. Its logic is simple and brutal: first, release a high tariff threat, and the market quickly reacts with panic, leading to a sharp drop in stock indices; then suddenly ease off, saying 'let's not increase for now', and the market rebounds as if released. This back-and-forth is even more stimulating than the 'pinpricks' in the cryptocurrency circle.


TACO strategy: real negotiation or fake scare?


The 'reasonable agreement' referred to by Trump always carries a hint of ambiguity. When a reporter bluntly stated at the White House that TACO is backing down, his response was thought-provoking: 'Do you really think this is backing down? This is negotiation.'

He also cited an example where after threatening to impose a 50% tariff on the EU, the other party immediately agreed to negotiations; isn't that a success?


We can see that the Trump administration has turned the trade war into a psychological battle. He does not necessarily want to impose tariffs, but this 'possibility' hangs over his opponents like a sword, forcing them to come to the negotiating table.


In his view, this is a sophisticated pressure tactic. Meanwhile, adversary countries like the EU, in their repeated attempts to 'deconstruct' Trump, have gradually become passive responders in this 'psychological trade war'.


Market crash + negotiation turnaround = success? Or a cost?


Although Trump and his cabinet members uniformly claim that this approach 'forces' multiple countries to take the initiative on tariff issues, the U.S. Secretary of Agriculture even stated that 50 countries have requested consultations. But we cannot ignore the chain reactions brought about by each tariff threat:


  • U.S. stocks are experiencing frequent and severe fluctuations, significantly impacting investor confidence;


  • The capital market is filled with panic, and trading strategies are forced to be 'reconstructed';


  • Conservative factions have even begun to sue Trump over his tariff actions, and some Republican congressmen are brewing legislation to limit the president’s taxing authority.



The 'Trump model' in the financial market: familiar rhythms, anxious investors


The biggest feature of TACO-style operations is 'unpredictability' — and this is exactly what the market fears the most.


A Wall Street trader even stated that the current market is harder to judge than in 2018, as the president's tweets can determine the direction of the market. For prudent investors, such 'policy pinpricks' are completely inhumane.


The problem is that such market conditions do not only exist in traditional finance. As more traditional assets shift to on-chain mapping (RWA), stablecoins and DeFi also begin to be affected.


If you still expect to use traditional models to evaluate future price trends, it is no different from trying to find direction with a compass in a storm.


So, how should we respond to such a 'black swan game' environment?


At this time, AI-assisted intelligent decision-making tools become particularly important. Taking Mlion.ai as an example, its news deep analysis function can identify shifts in policy direction in real-time and accurately extract the impact of events on the market; the price prediction model, combined with on-chain data and macro sentiment, helps capture early signs of market reactions.


Especially in the current context of frequent TACO strategies, the trends of stablecoins are closely correlated with RWA trading; Mlion.ai's data dashboard can help users monitor the trading flow of these assets and provide early warnings of potential risks.


In addition, if you are a strategic investor, Mlion.ai's AI chart analysis function can assist you in quantifying the potential technical signals that may arise after policy interventions, providing you with operational advice from multiple perspectives.


Will there be a 'blockchain version of TACO' next?


If USD stablecoins become the global trading medium, and their issuing institutions begin to possess 'threat-based minting rights' like Trump, does it mean that blockchain might also face its own 'TACO moment'?

This is not sensationalism — it is a potential reality happening.


When national-level games enter the on-chain financial system, every cryptocurrency holder should possess policy insight and strategic responsiveness. This is precisely the core competitiveness that AI investment research platforms like Mlion.ai are building for users.



Conclusion:


Whether TACO trade is a genius move is for everyone to judge in their own hearts. It may be effective in the short term, but it is not long-term safe. However, in today's increasingly 'on-chain' global economy, understanding this game logic and predicting its market fluctuations in advance has become a mandatory course for every investor.


And Mlion.ai is your guiding light in the complex financial maze.



Disclaimer: The above content is for information sharing only and does not constitute any investment advice! Please exercise caution in judgment and invest rationally!