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The Herald Scotland
08-07-2025
- Business
- The Herald Scotland
BRICS nations meaning explained: Donald Trump's latest tariff threat
Trump has teased negotiations over the tariff rates since, and late on July 6, said letters and deals on tariffs would start being communicated to various countries the following day. In another July 6 post on Truth Social, Trump threatened an additional 10% tariff on imports from another subset of countries. "Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff," Trump's post stated. "There will be no exceptions to this policy." What countries might he be talking about? More: US close to several trade deals ahead of tariff deadline this week, Trump officials say What does BRICS stand for? BRIC is an acronym coined in 2001 to describe rapidly developing countries that could impact the global economy. Those originally included: Brazil Russia India China South Africa joined the group in 2010, changing the acronym to BRICS, according to the Library of Congress. Over time, foreign leaders from each country began meeting and collaborating in formal summits. BRICS countries expanded in 2024 The BRICS countries make up approximately 45% of the world's population. Reuters reported in 2023 that the group of developing countries has sought to challenge the world order of Western dominance. In 2024, five more countries joined the bloc, according to Reuters. The newly admitted BRICS countries are: Iran Ethiopia Egypt Indonesia United Arab Emirates The BRICS countries issued a joint statement from their summit that started in Rio de Janeiro, Brazil on July 6, warning that tariffs could hurt global trade, according to Reuters. Trump's Truth Social threat came hours later. What were the original tariff rates slated for BRICS countries? Trump has previously threatened tariffs on the BRICS countries, apparently in response to efforts to undermine the dollar. In November 2024, he posted on Truth Social a threat to issue a 100% tariff against BRICS countries. So far, the only country to receive a 100% or higher tariff rate under this Trump administration was China. After weeks of the escalating trade war between the world's second-largest economy and the U.S., the two reached an agreement to lower the triple-digit tariff rates while they discussed a trade deal. Here are the tariff rates the other BRICS countries faced as of early April. However, rates above 10% were delayed for 90 days, and the Trump administration has teased that several deals could be announced the week of July 7. Brazil - 10% Russia - 0% (The White House said there are previously imposed sanctions on exempt countries that "preclude any meaningful trade with these nations." India - 26% South Africa - 30% Iran - 10% Ethiopia - 10% Egypt - 10% Indonesia - 32% United Arab Emirates - 10% Another tariff acronym: What does TACO stand for? Financial Times columnist Robert Armstrong coined "TACO trade" in May, describing how some investors anticipate market rebounds amid Trump's on-again, off-again tariff policies. The acronym stands for "Trump always chickens out." Armstrong describes TACO trade as many investors' strategy to buy into the market that dips when Trump announces steep tariffs on the assumption that he will back off his tariff order, and the market will rebound. Trump hit back at a reporter who asked about the term on May 28, saying, "you ask a nasty question like that. It's called negotiation." Contributing: Joey Garrison, Swapna Venugopal Ramaswamy, Carlie Procell, Josh Meyer, Cybele Mayes-Osterman, USA TODAY; Reuters Kinsey Crowley is the Trump Connect reporter for the USA TODAY Network. Reach her at kcrowley@ Follow her on X and TikTok @kinseycrowley or Bluesky at @
Business Times
10-06-2025
- Business
- Business Times
Don't fall for the trap of the Taco trade
[SINGAPORE] At first, it was ominous. Then, it became obvious. There's a new trade in town called the Taco trade, or Trump Always Chickens Out. Here's how it works: When US President Donald Trump announced his Liberation Day tariffs on Apr 2, the S&P 500 index tanked by more than 10 per cent in days. His tariff threat lasted less than a week before he backed down, pausing the implementation of higher tariffs for 90 days. In response, the index jumped by 9.5 per cent in a single day. And just like that, the Taco trade was born. Despite the initial pause, underlying trade tensions re-emerged when the US raised tariffs on China and engaged in a tit-for-tat tariff battle, raising US import levies to as high as 145 per cent at its peak. Amid the war of words between the superpowers, the stock market was unsettled. Then on May 12, the US and China called a truce for 90 days with the US reducing tariffs to 30 per cent for Chinese imports, and China lowering its import levy to 10 per cent for American goods. Once again, the S&P 500 index rallied on the news; last Friday (Jun 6), it closed at just a stone's throw from its all-time high. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up By then, traders had started taking notice of the emerging pattern. Financial Times columnist Robert Armstrong coined the term Taco trade, an acronym that quickly spread all over Wall Street. Second guessing the Taco trade If you have noticed the Taco trade pattern, you're not alone – and that's a big problem. The truth is if everyone is thinking the same way, then no one has an edge over anyone else. Furthermore, if every trader anticipates a market recovery after Trump backs down, then the competition turns into one in which the fastest fingers to enter a trade wins. That's a race, not a strategy. Trying to second guess when the stock market will change course is no different from timing the market. Here's the rub: According to Hartford Funds, if you missed the 10 best days (read: gains) in the stock market over the past 30 years, your returns would be less than half the amount from staying fully invested over the same period. In other words, mistiming your entry and exit will have a severe impact on your investment returns if you miss even a tiny number of days. Like walking on a tightrope, a minor misstep could have major consequences. So, don't try your luck. History has not been kind to trendy trades History hasn't been favourable to formula-based investment strategies – for good reason. Take the Dogs of the Dow (DD), a methodology popularised in 1991. The DD formula suggested that investors can maximise their investment yield by buying the top 10 highest-paying dividend stocks from the Dow Jones Industrial Average (DJIA) at the start of every year. But alas, it was not to be. Research from the NYU Stern School of Business showed that when an investment strategy becomes popular, the masses try to front-run the strategy, pre-emptively piling into the shares and driving up their stock prices. With a higher starting price at the beginning of the year, the DD group will inevitably find it hard to outperform the market. Therein lies the paradox: Even a proven formulaic strategy will fail if the masses pile into the stocks. Ironically, the simplicity that helps popularise the strategy eventually leads to its demise. But if that's the case, where does this leave investors? It's the business, not the acronym If acronym-laden trades don't work, then why have the original FAANG stocks been profitable to shareholders over the past decade? While Taco and FAANG are acronyms, the similarity stops there. The Taco trade is subject to the whims of Trump, which can change at any moment. FAANG stocks, however, are made up of growing US tech businesses. Coined in 2013, the original acronym FANG consisted of Facebook (now Meta Platforms), Amazon, Netflix and Google (now Alphabet). Apple was added in 2017. Here's the difference for FAANG: Over the past decade, the average return from FAANG stocks was over 900 per cent or 10x in returns. Tellingly, these gains are largely backed by growth in the quintet's free cash flow (FCF) per share. The best example is Alphabet. Over the past decade, its shares grew by 640 per cent. In terms of FCF per share, the gain was 643 per cent, which closely matches its stock price increase. The main reason the FAANG group's share prices have risen over this period lies in the solid gains in their free cash flow. Unlike the Taco trade, FAANG's gains were not dependent on the whims of a US president. The long-term difference Here's the twist: Buying a group of stocks such as FAANG does not guarantee great returns. The key to turning a great stock into great returns is time. Simply put, the average 10x return the FAANG stocks delivered was only possible when there was enough time for the businesses to demonstrate their ability to grow. For investors, patience is paramount. Sadly, many investors invariably lose their nerve along the way and sell too soon. The truth is, holding a stock for a decade is not as easy as it looks. Wealth manager Ben Carlson provided two telling statistics. First, the good news: if you look at the rolling 10-year periods since 1950, the S&P 500 index has delivered positive returns 93 per cent of the time. That is, you have a high chance of getting good returns if you hold for a decade. That's the reward for patient investors. Then, there's the unfortunate news. The probability of a bear market (an index decline of 20 per cent or more) during these same 10-year periods is 95 per cent. When you put the two together, the message is clear: Volatility is the price of admission. It's the toll booth you have to pass to get the returns you want. Get smart: It's a marathon, not a sprint There's no doubt that the allure of making a quick buck is strong. That's why trends such as the Taco trade are popular. Clever branding plays a role. But the reason the FAANG strategy has worked has not been because the five company names lined up to form a catchy acronym. The real insight was about giving great businesses enough time to run. For investors, the real trick is about cultivating the iron gut of a long-distance runner, not just picking the right stocks. As the numbers from Ben Carlson clearly show, the real game-changer isn't about timing your entry or exit, but in not exiting too soon. Because when the market inevitably tests your resolve, that unwavering patience, not some trendy trade, will be the real differentiator between success and failure to get what you want. So, choose great businesses over stock prices, endurance over speed, and above all, patience over quick trades. In the long run, the road less travelled is the most rewarding, in my eyes. The writer is co-founder of The Smart Investor, a website that aims to help people to invest smartly by providing investor education, stock commentary and market coverage
Yahoo
07-06-2025
- Business
- Yahoo
Why Democrats' 'TACO' insult could backfire terribly
Democrats are trying to make 'TACO' — or 'Trump always chickens out'— a new political slogan to get under the president's skin. But it is not as clever a quip as they think it is, and it creates a perverse incentive for Trump to push the red buttons they don't want him to push. Financial Times columnist Robert Armstrong coined the term "TACO" trade last month to describe how the president, in the face of market pressure, constantly backs off the biggest tariffs he slaps on other countries. But the term really took off last week after Trump responded angrily to a question from a reporter about what he thought of the term. 'Don't ever say what you said,' he warned the reporter, after a rambling explanation of why he believes he does not, in fact, chicken out. 'That's a nasty question. To me, that's the nastiest question.' Since then Democratic lawmakers and staffers have been trying to make TACO a thing. The Democratic National Committee handed out free tacos from a truck emblazoned with the term and an image of Trump in a chicken suit near the Republican National Committee's headquarters in Washington this week. Rep. Jamie Raskin, D-Md., posted a photo of an unappetizing taco lunch on BlueSky and wrote, 'It's TACO Tuesday on Capitol Hill! I hear the White House celebrates every day.' And in a foolishly hawkish spin on the quip, Senate Minority Leader Chuck Schumer recently condemned 'TACO Trump' for negotiating a nuclear deal with Iran after his tough talk toward the country. TACO has its merits as an analytic lens — it's broadly true that Trump has backed down from many tariffs in response to pressure from corporate America and the markets. And it's not hard to see why it's tempting to pounce on any opportunity to needle Trump with a put-down that appears to bruise his ego. Think about the instant virality of the 'weird' insult in the summer of 2024. But Democrats would do better to drop this one as a major talking point. First, TACO is not entirely accurate. Even with Trump backing off his biggest tariffs, he is still maintaining hugely consequential 10% baseline tariffs on imports from every country around the world and far larger tariffs on specific industries such as steel and aluminum, and specific countries including China, Canada and Mexico. Even after Trump's 'chickening out,' his tariffs are creating an extraordinarily volatile business and investment climate, pushing us toward higher prices and generating conditions for a potentially severe downturn in economic growth. Democrats ought not to obscure that as the economy stands on the brink. Second, it is straightforwardly wrongheaded as a political slogan. Why on Earth would Democrats dare Trump to follow through on his most extreme tariff threats? If this slogan were to really work, if it really did burrow its way into the deepest parts of Trump's brain, then it would nudge him and his allies to cling more tightly to the most extreme versions of Trump's bad economic policies. We've been fortunate to have been spared from such extremes — so far. But trade negotiations are still ongoing, and goading him to ignore potentially economy-saving pressure campaigns is foolish. Consider how Armstrong, the columnist who coined TACO, reflected on the explosion of the term in a recent podcast episode: Let us state clearly, chickening out is good and something to be celebrated. Bad policy chickening out, hooray. So this is an unintended consequences thing if, as I think is quite unlikely by the way, given that I am an unimportant person and the president is an important person, if this gets into his head and he digs in his heels about some of this stuff. That is really a disaster for which I am very, very sorry. That the Democrats appear to be playing chicken with Trump and seeing who will blink first is not particularly mature, and seems to make a mockery of the stakes before us. Third, TACO threatens to undermine Democrats' messaging that Trump poses an existential threat to democracy. If Trump really is, as Democrats say, an aspiring autocrat willing to shred the Constitution through his assault on the freedoms of civil society, it's a bit odd to simultaneously argue that Trump is all talk and no action. As we all know, Trump often does the opposite of chicken out: He's not holding back in his promises to pursue an aggressive mass deportation regime, he's doggedly pursuing a bill that will gift the rich with favorable tax codes and throw millions off of their health insurance, and he's trying to quash freedom of expression. It's tonally awkward to point to all these things as perilous and at the same time call the man a coward who doesn't follow through. Is Trump chaotic and bad at executing policy? Yes. But he does try — and succeed — at getting some consequential stuff done. Dems shouldn't be encouraging him to do more of it — or casting the decline of a republic as a game. On top of all that: TACO just sounds corny. This article was originally published on
Daily Mail
06-06-2025
- Business
- Daily Mail
Mystery will surfaces in battle over tech mogul's $500million fortune
A mysterious will said to be the final wishes of Zappos founder Tony Hsieh has emerged five years after his death. The tech giant, worth over $500 million, died after a fire engulfed his friend's Connecticut home in 2020, having only retired three-months earlier from the billion-dollar firm. His family had until recently believed he left no final will, with a new report from the Wall Street Journal saying the document mysteriously appeared this spring. According to the outlet the document has Hsieh's signature on it and is dated 2015, five years before the 46-year-old died. In the months leading up to his death he had been battling severe drug and alcohol abuse. The will was delivered to the office of Nevada based estate attorney Robert Armstrong, who had never met Hsieh before or worked with him. He was named as an executor. The discovery has thrown his probate case into turmoil. Armstrong said in court filing seen by the outlet, that he was shocked to have received the document. The will is said to transfer over $50 million and several Las Vegas properties to a series of trusts with as yet unknown beneficiaries. It is also said to include several charitable donations including $3 million to his alma mater Harvard University. The rest would go to his family. Hsieh was inside a shed near the property in New London when he was caught in the fire At a hearing on Thursday there was no further clues as to how legitimate the document is, or where it came from. The court heard that after Armstrong received the will he got a phone call from a man named Kashif Singh. Singh told the lawyer that the will had been passed to him by his late grandfather, Pir Muhammad, who was named as a co-executor. The revelation has stumped those involved in Hsieh's estate and the court, with both sides unsure how to proceed. Armstrong, alongside attorney and co-executor Mark Ferrario, have claimed that Hsieh's family's legal team have been aggressive in their approach. In a filing, they said the family's lawyers had adopted a 'scorched earth approach' and made over 70 requests for documents to 'invalidate the will'. Dara Goldsmith, a lawyer representing the family, told the Journal: 'There is nothing 'scorched earth' about thoroughly examining a document that comes out of nowhere, more than four years after Tony Hsieh's death.' She added that Richard Hsieh, his father, 'has faithfully administered his son Tony's estate and guarded Tony's legacy.' Goldsmith told the court on Thursday that the family hadn't decided on whether to challenge the will. Prior to his death, Hsieh had gone on a massive buying spree, buying up at least seven multi-millionaire dollars homes, a private club and a vacant lot. He spent at least $50 million as part of his plan to relocate to the millionaires' playground of Park City, Utah. Hsieh, who was born in Illinois and was the son of Taiwanese immigrants, studied at Harvard University before he joined Zappos - then called - in 1999. As CEO, he helped transform the fledgling internet start-up into a billion-dollar business. Zappos was sold to Amazon for $1.2 billion in 2009, but Hsieh remained with the company until his retirement in 2020. For years, Hsieh also worked to revitalize downtown Las Vegas, pledging $350 million in 2013 for redevelopment. The same year he moved Zappos' headquarters into the former Las Vegas City Hall building.
South China Morning Post
05-06-2025
- Business
- South China Morning Post
Why Taco trade is no laughing matter for the global economy
Everyone loves a catchy acronym. In financial markets, investment analysts spend a lot of time trying to come up with initialisms that encapsulate a popular theme or trend. A good example is FOMO, or fear of missing out , especially when it comes to stock market rallies. Another one is Brics, first coined in 2001 by former Goldman Sachs economist Jim O'Neill to draw attention to opportunities in Brazil, Russia, India and China. However, it is not often that a journalist coins an acronym that takes markets by storm. Last month, Financial Times commentator Robert Armstrong came up with Taco – which stands for ' Trump always chickens out ' – to describe the recent rally in global markets. He attributed the rally to investors 'realising that [US President Donald Trump] does not have a very high tolerance for market and economic pressure and will be quick to back off when [his trade] tariffs cause pain'. The Taco trade took hold on April 9, the day Trump suspended the 'reciprocal' tariffs he imposed on nearly all America's trading partners a week earlier. Since then, Trump has made a series of partial climbdowns that have convinced many investors that his bark is worse than his bite. Having threatened to fire US Federal Reserve chair Jerome Powell, Trump backed down and said he had no intention of seeking his ouster despite continuing to pressure the Fed to lower interest rates.
