[Text/Observer Network Qi Qian] In the past few months, U.S. President Trump's tariff policy has changed frequently: repeatedly proposing high tariff threats, but finally ending with compromises. This has caused Wall Street to experience historically roller-coaster fluctuations. Now, investors are beginning to take his words with a grain of salt and summarize his tariff policy as the "cowardly trade," using it as a mockery.

According to reports, the term "cowardly trade" (Taco trade) was first proposed by a columnist for the British Financial Times as an abbreviation for "Trump always chickens out."

On May 28th local time, when Trump first heard this description, he lost his temper immediately.

According to reports from the U.S. Consumer News and Business Channel (CNBC), at a White House press conference, Trump seemed to hear the term "cowardly trade" for the first time and strongly rejected it, insisting that he had not retreated on trade issues and everything was just negotiation tactics.

"I've never heard of this term... don't say everything you want, this question is too disgusting," Trump raged when questioned by a CNBC reporter, "This is a disgusting question. For me, this is the most disgusting question."

Trump answered questions from reporters in the White House on May 28th, video screenshot.

During this time, Trump began a lengthy defense.

"Because I imposed a 50% tariff on the EU, they called and said, 'Let's meet now, let's meet now,' do you call this retreat?" Trump retorted, asking if the situation would have been better if he maintained tariff levels at "absurdly high levels," such as imposing a 145% tariff on China?

Trump emphasized: "High tariffs mean no business. This is negotiation!"

Late that evening, Trump mentioned the topic again: "They will say, 'Oh, he's a coward, he's a coward,' this statement is incredible. Usually, I hear the opposite - they will say you are too tough!"

Trump turned black after hearing "cowardly trade."

The South China Morning Post reported that despite Trump's strong denial, investors have already seen the pattern behind the "cowardly trade."

On April 2nd, Trump imposed high "reciprocal" tariffs on dozens of countries on "Liberation Day," causing massive stock market fluctuations worldwide. A week later, Trump announced a 90-day deferral policy during which tariffs would be reduced to 10%.

During this period, Trump repeatedly raised tariffs on China. The U.S. tariff rate on China increased from 20% initially, to 54%, then to 104%, 125%, and finally to 145%. China resolutely retaliated, and there was widespread concern among various sectors in the United States about supply chain disruptions. From May 10th to 11th, high-level economic and trade talks between China and the U.S. were held in Geneva, Switzerland, where both sides agreed to lower tariffs within 90 days, reducing the tax rate by 115%.

For Canadian goods, Trump initially threatened to impose a 25% tariff, including steel and aluminum, then announced a one-month suspension.

Last week, Trump threatened to impose a 50% tariff on the EU starting June, but just a few days later (on the 25th), he announced plans to delay the tax until July 9th to allow more time for negotiations.

Reportedly, given Trump's softened stance on EU tariffs, European stocks rose on Monday, while the U.S. S&P 500 index recorded its largest gain in weeks on Tuesday. In response, UBS analysts stated: "These retracements are so frequent that investors should rationally expect them." IG Group analysts observed: "The 'cowardly trade' has won again."

However, some analysts worry that knowing that Wall Street uses the term "cowardly trade" to describe his tariff policy will backfire on Trump, making him even more aggressive in the future and further destabilizing the global economy.

Ali Wyne, senior analyst at the Belgian think tank International Crisis Group, said: "Trump considers himself a highly skilled dealmaker, so he is sensitive to any suggestion that foreign counterparts are outsmarting him or manipulating him, especially when such statements come from one of his most focused groups: Wall Street analysts."

"He doesn't want to be seen as yielding to China," Wyne added, "but he also doesn't want to face the political and economic consequences of an indefinite trade escalation with a 'strategic competitor' whose retaliatory capabilities are much stronger than when he first took office."

The South China Morning Post believes that as the pattern of stock market rebounds becomes increasingly apparent, Trump learning about the term "cowardly trade" may weaken Wall Street's ability to profit from it. Peter Berenzin, an analyst at BCA Research, a Canadian market research company, said: "'Cowardly trade' rule number one is: don't tell Trump about 'cowardly trade.'"

This article is an exclusive contribution from the Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7509656002775286298/

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