The concept, measured
TACO Index Explained
Tariff Threats, Follow-Through, and the PEPIndex Behind the Concept
Photo by James A. Molnar on Unsplash
Tariff Threats, Follow-Through, and the PEPIndex Behind the Concept
Photo by James A. Molnar on Unsplash
TACO stands for Trump Always Chickens Out. The TACO Index is a colloquial name for a measurable pattern: presidential economic threats — tariff announcements, trade ultimatums, sanction deadlines — are made with high confidence and then partially or fully reversed before full implementation.
The concept gained traction as a way to describe the recurring gap between announced policy (e.g., "145% tariff on China") and what was actually applied at the border (e.g., 28% after exemptions and reversals). That gap is not an accident — it is the quantifiable signature of policy pressure used as a negotiating tactic rather than a firm commitment.
How a threat moves through the index
Every event follows the same five stages, and can resolve at any of them.
A specific, actionable presidential statement or document is detected and classified.
DetectedRestatements and de-escalations attach to the original threat instead of counting twice.
MonitoringOnce the stated or implied deadline passes, an open forward-looking threat adds live pressure to the index.
MonitoringImplementing documents, court rulings, congressional actions and independent reporting are linked as evidence.
MonitoringThe event resolves to a published outcome and is scored from 0 (carried out) to 100 (walked back).
ResolvedWhen a 145% tariff is announced on Chinese goods, markets react, negotiations begin, and exemptions accumulate. By the time the tariff is actually collected, the effective applied rate — customs-collected duties relative to import value, published by USITC — is often a fraction of the headline rate.
This statutory-vs-applied gap is not a side effect: it is the core signal. The gap represents the degree to which a threat was a bluff, a negotiating position, or a genuine policy commitment.
| Event | Announced rate | Applied rate | Gap | PEPIndex score |
|---|---|---|---|---|
| Liberation Day: China | 145% | ~28% | 117pp | 82.1 |
| 14-Country Deadline | 25% | ~11.6% | 13.4pp | 60.5 |
| Section 301 China / Phase One | 25% avg | ~12.5% | ~12.5pp | 53.0 |
| Section 232 Steel/Al | 25% | ~14% (post-exemptions) | ~11pp | 34.0 |
Composite index, last 12 months
Weekly · higher means more threats walked back
How often threats are walked back
Share of resolved threats, by domain
What the index tracks
Tracked events by policy domain
The TACO name is memorable and accurate, but it is not the right frame for analysts, supply-chain teams, and data teams that need to embed trade-policy risk into models, dashboards, and procurement workflows.
PEPIndex (Presidential Economic Pressure Index) is the quantitative instrument:
| User type | What they get from PEPI |
|---|---|
| Trade-policy analysts | Daily pressure score with event provenance and statutory authority |
| Supply-chain strategy teams | Early warning before tariff exposure hits procurement costs |
| Procurement / sourcing teams | Sector-level tariff risk before supplier renegotiation |
| Market-risk / macro analysts | Structured daily policy-risk factor for macro models |
| Data teams at logistics platforms | API-ready tariff pressure layer |
Live index, 25+ API endpoints, Federal Register linkage, and peer-reviewed economic impact methodology.
View the PEPIndex dashboard API documentation →