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Economists are weighing in on President Donald Trump’s recent escalation of tariffs against China, together with his subsequent retraction over the weekend, which followed a significant selloff in risk assets last Friday.
On Sunday, economist Peter Schiff took to X, remarking, “TACO strikes again,” a term recently popularized by traders, short for “Trump Always Chickens Out.” This describes Trump’s tendency to issue threats without following through, particularly regarding tariffs.
Schiff’s comment came after Vice President JD Vance characterized Trump’s threat of a 100% tariff on China as a mere “negotiation tactic.”
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“It’s not wise to show your opponent that you’re bluffing during negotiations,” Schiff remarked, adding that Trump had previously highlighted his “great relationship with China’s wonderful president.”
In a post on Truth Social on Sunday, Trump aimed to calm investors by stating they should not be concerned about China, asserting, “it will all be fine.”
He mentioned that Chinese President Xi Jinping “had a bad moment,” emphasizing that Xi does not wish for a depression in his nation. “The U.S. wants to assist China, not harm it,” Trump added, as noted by economist Mohamed El-Erian on X.
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University of Michigan economist Justin Wolfers compared the trade dynamics between the U.S. and China to his “middle school love life,” describing it as “on one week, off the next, filled with high drama, passing notes, heartache, reconciliations, and gossip,” concluding that “it was a repeating cycle every week.”
