Did a reporter make President Donald Trump aggressive again? A new term on Wall Street has been born: TACO – or Trump Always Chickens Out. The president, when asked about this at the Oval Office, was visibly upset by the question. “Six months ago, this country was stone-cold dead, we had a dead country, we had a country that people didn’t think was going to survive, and you ask a nasty question like that,” he said. The president proved the reporter wrong two days later, retaking a hard-line stance on trade.
TACO? That’s a Tariff
Last week, the president approved a controversial merger between US Steel and Japan's Nippon. He celebrated the move during a May 30 event at US Steel's Irvin Works in West Mifflin, PA, where he made a shock trade policy announcement.
Trump told US steelworkers that he will double tariffs on steel imports to 50%, vowing that the increase will "further secure the steel industry." “At 25%, they can sort of get over that fence," Trump continued. "At 50%, they can no longer get over the fence.” The president later clarified in a Truth Social post that the higher levies will go into effect on June 4.
The industry applauded the decision, with the American Iron and Steel Institute (AISI) saying it will "keep the American steel industry strong." Kevin Dempsey, the AISI president and CEO, said shortly after the announcement:
"AISI welcomes President Trump’s announcement today that he is increasing steel tariffs to 50 percent. Led by China, global steel overcapacity and production continues to grow, even as overall global steel demand is being impacted by the sharp downturn in the Chinese construction sector. As a result, Chinese steel exports to the world have more than doubled since 2020, surging to 118 million MT in 2024 -- more than total North American steel production. Given these challenging international conditions that show no signs of improvement, this tariff action will help prevent new surges in imports that would injure American steel producers and their workers."
This comes as there are still lingering questions surrounding the US Steel-Nippon merger. Peter Navarro, the White House trade adviser, told reporters at the White House on May 29 that "Nippon Steel is going to have some involvement, but no control of the company.” Trade Representative Jamieson Greer said in an interview with CNBC's Squawk Box that US Steel will still own the company, but noted that details "remain confidential, relatively."
Big Trouble in Little China
Are US trade negotiations with China about to head off a cliff?
In a May 30 Truth Social post, Trump accused China of violating the mid-May trade agreement that resulted in a 90-day suspension of most of the tariffs imposed since April. While the president stopped short of providing details, he accused the regime of not following through on the provisions of the trade truce.
"I made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation, and I didn't want to see that happen. Because of this deal, everything quickly stabilized and China got back to business as usual," Trump said. "The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!"
Other administration officials reiterated Trump's position. Greer noted that Beijing is "slowing rolling their compliance." White House Deputy Chief of Staff Stephen Miller told reporters that "China has abrogated the agreement."
China hit back at the United States. A spokesperson stated that Washington must "correct its erroneous actions" and "cease discriminatory restrictions against China." Both governments must "uphold the consensus reached at the high-level talks in Geneva," the individual said in a statement to the press.
Tariffic Data
US officials must have been jumping for joy inside the White House. A treasure trove of economic data was released, and the numbers spotlighted everything the president and his team wished to see.
First, the Federal Reserve's preferred inflation metric, the Personal Consumption Expenditure (PCE) price index, slowed to a seven-month low of 2.1% in April. Core PCE, which strips out the volatile effects of energy and food prices, eased to 2.5%, the lowest in about four years.
Second, the US goods trade deficit crashed 46% in April to $87.62 billion, down from the record high of $162.25 billion registered in March. Additionally, this came in far below the consensus forecast of $141.5 billion. Imports declined by nearly 20%, while exports increased by 3.4%.
Finally, another survey suggested that consumer sentiment rebounded. The final University of Michigan May Consumer Sentiment Index rose to 52.2, up from 51 in April. The Current Conditions Index slipped, but the Consumer Expectations Index picked up. The one-year inflation outlook was little changed at a lower-than-expected 6.6%, and the five-year horizon tumbled from 4.4% to 4.2%.
Put simply, after a highly volatile couple of months, these are the figures the administration wants to digest. Whether some of them are good or bad will be left up to the market watchers.
Let’s Get a TACO
So, President Trump is a chicken, huh? Perhaps without realizing the error of their collective ways, the mainstream media might have poked the bear. While the real estate billionaire mogul had adopted a softened approach to his trade agenda, that reporter’s question might have forced Trump to return to his April 2 “Liberation Day” stance and resume his scorched-earth tactic to the global economy. The press may live to regret taking a bite of the TACO.
