Wall Street has a new nickname for Trump’s trade policy: TACO. It stands for “Trump Always Chickens Out.” And on Friday, steel and aluminum stocks got absolutely hammered because of it.
The Financial Times reported that the Trump administration is preparing to roll back some of the tariffs — up to 50% — that the president slapped on steel and aluminum imports last summer. Commerce Department and USTR officials reportedly believe the tariffs are hurting consumers by driving up prices on everyday items like pie tins, food cans, and drink containers. Voters heading into the November midterms aren’t happy about it either.
The market reaction was immediate and brutal. Nucor (NUE) and Steel Dynamics (STLD) each dropped about 5%. Cleveland-Cliffs (CLF) slid 7%. On the aluminum side, Century Aluminum (CENX) cratered 12% and Alcoa (AA) lost 5%. London Metal Exchange aluminum prices hit a one-week low, even as U.S. aluminum buyers are already paying record premiums for physical supplies.
The irony is thick. Trump hit more than 400 products with tariffs last year — wind turbines, bulldozers, railcars, motorcycles, appliances, heavy equipment, and hundreds more. He told rally crowds that tariffs would make the country “rich as hell.” Now, with only 30% of Americans approving of his handling of the cost of living and 59% actively disapproving (including one in five Republicans), the administration is scrambling to exempt some items and launch narrower, more targeted national security probes instead.
Peter Navarro called the FT report “fake news,” and a White House official insisted Trump will “never compromise on reinvigorating domestic manufacturing.” But the pattern is hard to ignore. This is the same president who has repeatedly announced sweeping tariffs only to delay, revise, or walk them back when the political heat turns up.
For traders, the takeaway is straightforward: if you’re holding steel or aluminum stocks based on tariff protection, you’re riding a policy that’s one bad poll away from getting diluted. The TACO trade isn’t just a joke — it’s a risk factor. And the market just priced some of it in.