U.S. President Donald Trump gestures during a cabinet meeting at the White House in Washington, D.C., U.S., August 26, 2025. REUTERS/Jonathan Ernst

Wall Street's reliance on the trade move that they have deemed "Trump Always Chickens Out" aka TACO is starting to make investors worried as the move, according to Axios, is becoming riskier.

Although the TACO move on tariff threats has been "keeping stocks afloat even as trade tensions with China heat up," Axios says, experts are starting to worry about its ultimate yields.

"Were there not a substantial expectation of TACO, the market moves here would be substantially larger," says Bob Elliott, CEO of Unlimited Funds.

While things right now may not look to mimic April, when the stock market plummeted nearly 20 percent after President Donald Trump announced his global tariff, Axios says that "it's a reminder of the risks that investors were happy to ignore in recent months."

Following Beijing announcement of plans for new export controls on rare earths, Trump fired back, "teasing out an additional 100% tariff on imports from China," Axios explains.

"On Friday, stocks sold off to the tune of $2 trillion, in the biggest one-day selloff since April. Then like clockwork, dip buyers showed up this week, until trade tensions returned," Axios says.

China's — not Trump's — escalations on trade this time is what makes TACO so problematic, Elliott says.

"The problem with TACO underpinning market resilience is that this time around, China is escalating tensions more than Trump," Elliott says. "That means any resolution is less within Trump's control, which is critical for the TACO trade that relies on the president changing his mind."

The economic backdrop, Axios says, is also bleak, with the "health of the labor market unclear given the government shutdown," as well as consumers feeling the sting of higher prices, and areas of the stock market "tied to the real economy" such as retail and homebuilders" starting to falter.

And while Big Tech stocks are currently driving the market, Axios says, AI stocks aren't making money yet.

"It's going to take a lot more than the AI narrative to be able to hold up the stock market if we see a combination of a meaningful weakening in domestic conditions plus escalating trade tensions," Elliott says.

While Dirk Willer, global head of macro strategy at Citi, tells Axios that the trade war heating up is "unnerving," he is hopeful the TACO move still plays well.

"We are still hopeful that this will play out the way it played out the last time, without a major rift" between the U.S. and China, he says.

José Torres, senior economist at Interactive Brokers, is buckling up for a bumpy ride.

"There will be turbulence along the way, but this will be part of the economy navigating to clearer skies," he says.