§46 —
On liberation
Democrat
TACO
The chart first. Between the April 2 announcement and the April 8 close the S&P 500 lost roughly 12 percent, closing at 4,982.77 12. On April 9, the day of the pause, it gained 9.52 percent to 5,456.90, the biggest S&P day since 2008 3. The 10 percent baseline stayed. That is the pattern in seven sessions: the threat, the drop, the fold, the rebound.
Then the coinage. In May the Financial Times columnist Robert Armstrong named the trade the desks were already making — TACO, Trump Always Chickens Out — and on May 28 a reporter put it to the president. His answer, in order: "I've never heard that." "You call that chickening out?" "It's called negotiation." "Don't ever say what you said. That's a nasty question" 4.
The last fold was not his. On February 20 the Supreme Court held, 6 to 3, that the emergency statute does not authorize tariffs, voiding the ones announced that April 5. The refunds followed: in July the customs line ran backwards, $26 billion collected against $36 billion paid back 6.
Sources
- Stocks staged a comeback after a volatile April in which the S&P 500 fell about 12 percent from the tariff announcement to its low — NBC News, 30 April 2025 ↑
- S&P 500 closed at 4,982.77 on 8 April 2025 — CNBC, 8 April 2025 ↑
- S&P 500 up 9.52 percent to 5,456.90 and Nasdaq up 12.16 percent on 9 April, the biggest S&P gain since 2008 — CNBC, 9 April 2025 ↑
- The "TACO trade," coined by the FT's Robert Armstrong; asked about it: "I've never heard that"; "You call that chickening out?"; "It's called negotiation"; "That's a nasty question" — CNN, 28 May 2025 ↑
- The Supreme Court held 6-3 on 20 February 2026 that IEEPA does not authorize tariffs, invalidating the reciprocal tariffs announced 2 April 2025 — Congressional Research Service, LSB11398 ↑
- Customs duties in July 2026: $26 billion collected, $36 billion refunded, a net of negative $9 billion; about $100 billion refunded May through July — Congressional Budget Office, Monthly Budget Review, August 2026 ↑
Republican
LIBERATION DAY
The word was used twice, and the first time tells you what it meant to the man saying it. From the inaugural address: "For American citizens, January 20th, 2025, is Liberation Day," and in the same speech, "the golden age of America begins right now" 1. The second Liberation Day was April 2, when reciprocal tariffs were announced on nearly every trading partner; on April 9, hours after the country-by-country rates took effect and with markets falling, the president paused them for 90 days and kept a 10 percent baseline 2.
I will defend the theory as stated: a tariff is a price you make the other side pay to reach your customers, and reciprocity is a fair word for matching what they charge you. The theory says nothing about the pause. What the pause says about the theory is on the other side of the page, priced to the decimal.
Sources
- "For American citizens, January 20th, 2025, is Liberation Day"; "the golden age of America begins right now" — second inaugural address, transcript — PBS NewsHour, 20 January 2025 ↑
- Reciprocal tariffs announced 2 April 2025; country-specific rates paused 90 days on 9 April with a 10 percent baseline kept — PolitiFact, 9 April 2025 ↑
“I keep a chart in the glovebox, folded. April 2, the tariffs on nearly the whole world. April 8, the index closes at 4,982 — about twelve percent gone. April 9, the pause: up nine and a half percent in one session, the biggest since 2008. The 10 percent stayed. A newspaper columnist gave the shape a name in May. Sorry — one thing before I go — the man said "It's called negotiation." Negotiation with whom, on April 9, at the moment the pause was posted?”— Lou
“He declared Liberation Day twice — once at the inauguration and once in April — and the second one liberated twelve percent from the market in a week. Then he paused it for ninety days and the market had its best day since 2008. A guy on a trading desk gave that a name, and the name is the only thing from April that's still in effect.”
“Liberation Day was the strategy, the pause was the strategy, and the rebound was proof the strategy worked — a market that goes down twelve percent and then up nine is a market receiving information.”