Welcome back to KPA Wealth. — In today’s post, we break down President Trump’s newly announced 30% tariffs on the EU and Mexico and ask the real question: is this the beginning of a trade war, or just another case of “Trump Always Chickens Out”? Let’s dive into the pattern, the politics, and the market response behind the latest round of tariff tension.

• Tariffs or Tacos?

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Tariffs or Tacos?

The Big Announcement
President Donald Trump has declared a 30% tariff on imports from the European Union and Mexico, scheduled to begin August 1. The announcement came via official letters to both regions’ leaders and sent ripples through the media and diplomatic channels. But the real question remains, is this another Trump tactic, or will he follow through?

TACO: Trump Always Chickens Out
The “TACO trade,” coined on Wall Street, stands for "Trump Always Chickens Out" and this might be its clearest example yet. Trump’s track record suggests he often uses tariffs as leverage rather than actual policy. His bold declarations are typically followed by economic pushback and, ultimately, retreats.

Déjà Vu: The Liberation Day Pause
Consider April’s “Liberation Day” tariff rollout: Trump slapped a near-global 10% duty on imports, only to pause it after a stock market dip. That 90-day freeze was set to expire this week — yet instead of reinstating those tariffs, Trump extended the pause and issued new letters threatening even harsher penalties.

Markets Shrug, Diplomats Wait
Wall Street, well-versed in Trump’s patterns, barely reacted. Stocks held near highs, suggesting traders expect another walk-back. Meanwhile, EU Commission President Ursula von der Leyen and Mexican officials criticized the move but left the door open to negotiation — a sign they, too, may expect the tariffs not to materialize.

Leverage Over Policy
Trump’s new letters were sent to over 20 trade partners, not just the EU and Mexico. He also hinted at targeted sector tariffs like 50% on copper and possibly 200% on pharmaceuticals. These look more like tools of negotiation than settled policy. Once again, it appears Trump is using tariffs as a lever, not a solution.

Emboldened or Blustering?
Trump cites strong markets as proof his tariff strategy is working. But the TACO pattern suggests he may be misreading investor sentiment. April’s near 20% drop in the S&P 500 forced him to reverse course. Unless markets fall again, he may continue his tough talk but follow-through remains uncertain.

Bluff or Brinkmanship?
Despite his rhetoric, Trump allowed the previous tariff pause to lapse without action. Instead, he opted for new threats with a new deadline. That’s not a policy reset — it’s a strategic stall. This allows negotiations to continue while keeping global partners on edge. It’s pure TACO.

In short, this looks and feels like another performance in the ongoing trade drama. Trump’s pattern of aggressive announcements followed by de-escalation is hard to ignore. Unless there's significant market backlash or a diplomatic standoff, we’re likely to see more deals than tariffs by August 1.

So, are we getting real economic change — or just another round of Trump’s favorite trade tactic? I’m betting on tacos.

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Kyle Allgair
CEO of KPA Wealth
📞 (279) 977-8149 | ✉️ [email protected]
🌐 KPAhomeloans.com

Kyle Allgair is the CEO of KPA Wealth, and is continuously helping clients build wealth through real estate and strategic financial planning. Contact him for personalized advice on achieving your financial goals.