Published on: February 27, 2026 at 11:05 am
After the stock market took steep drops in reaction to President Donald Trump’s initial tariff decisions, it has since stabilized and even soared, despite the persistence of tariffs-fueled economic anxiety persists. According to Academy of Management Scholar Adam Galinsky of Columbia Business School, one reason is that the level of uncertainty surrounding the early Trump tariffs has been reduced by a new kind of adaptation to the President’s continuing announcements of tariff changes.
“Uncertainty is a powerful thing, and markets, in particular, perform negatively in the face of uncertainty,” Galinsky said.
“Tariffs have always created two things: One is the potential of increased costs to companies and consumers, but also uncertainty, because Trump never seemed to stick with his plan,” he said.
“Without clearly knowing his plan, no one could plan effectively.”
But, Galinsky observes, as time went on, the markets started to notice a pattern in Trump’s about-faces on tariffs, and some people even gave it a name: TACO, an acronym for “Trump always chickens out.” Many people made humorous posts while it was trending on social media.
“People want certainty, and the phrase ‘Trump always chickens out’ is actually a form of certainty,” Galinsky said. “The market is basically saying, ‘We don’t need to worry about the tariffs because Trump’s always going to give in.’
“Trump’s pattern of talking tough and then chickening out has actually been pretty effective, because it’s a pattern that people understand and it becomes its own form of certainty,” he said.
Even though his specific stance on tariffs for a given country can still change by the day, investors are becoming used to his pattern of talking tough and not following through. That’s why, despite the many economists predicting economic volatility or even a recession on the horizon, the markets have reacted more optimistically to recent steps in President Trump’s tariff negotiations.
Editor’s note: After this article was written, President Trump did impose tariffs on many countries’ imports. In November 2025, the United States Supreme Court began hearing oral arguments debating whether the president has the authority to levy tariffs on any goods imported into the U.S. through executive orders. On February 20, 2026, the Supreme Court ruled in Learning Resources Inc. v. Trump that “the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose sweeping, open-ended tariffs—striking down the legal foundation for a central pillar of the administration’s trade strategy,” according to Brookings, which noted “The decision removes the fastest tool for imposing broad country-level duties, but it does not end the tariff debate.”
