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As LA immigration protests spread across the US, will Trump go Taco again?
US President Donald Trump's militarised response to immigration protests in Los Angeles has triggered backlash — reviving questions over whether he will backtrack, as he has often done under pressure. As protests spread nationwide, all eyes are on the White House. Will Trump follow the Taco pattern — Trump Always Chickens Out? read more
US President Donald Trump speaks as he participates in a roundtable discussion with the Fraternal Order of Police at the White House in Washington, DC, US, June 5, 2025. File Image/Reuters
The ongoing protests in Los Angeles which were sparked by immigration enforcement raids were met with a swift federal response from Washington.
United States President Donald Trump's move to deploy thousands of US troops to the city has resulted in a legal battle.
At the heart of the controversy lies a simple question with complex implications: will Trump once again reverse course if opposition continues to mount?
Trump's decision to send military personnel into LA — overriding objections from California officials — has reopened scrutiny into a longstanding pattern of policy flip-flops, especially when resistance grows or market impacts deepen.
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This pattern, so familiar that it has come to be known by the acronym TACO — Trump Always Chickens Out — is now being put to the test once again.
How Trump got the Taco tag
The term 'TACO' surged into public discussion in May 2025 after journalist Robert Armstrong used it in a Financial Times opinion column analysing Trump's trade strategies.
It gained immediate traction for encapsulating a familiar political behaviour: the President often makes aggressive pronouncements or policy moves, only to withdraw them later under pressure.
Armstrong wrote that the market was realising that 'the US administration does not have a very high tolerance for market and economic pressure, and will be quick to back off when tariffs cause pain.'
He dubbed this the 'Taco theory.'
Since then, commentators and financial analysts have pointed to multiple episodes that fit this mold.
Among the most cited were the rapid pause in 'Liberation Day' tariffs just a week after their announcement, Trump's public call to dismiss Federal Reserve Chair Jerome Powell followed by his retreat from that stance, and an agreement to scale back China-related tariffs after initial escalation.
Financial Times' Katie Martin cited three such turnarounds that had tangible impacts on market performance.
Other reports, like Shannon Pettypiece's for NBC News, documented as many as ten specific trade reversals: from duties on European wine and Canadian goods to proposed levies on iPhones and children's toys.
As protests and unrest continue across California and spread to other cities like Dallas, Austin, Chicago, and New York, the question resurfaces: will Trump remain committed to this path, or will the 'Taco theory' play out once more?
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Why Trump's federal deployment in questionable
The Trump administration has defended its decision to deploy a significant military presence to Los Angeles, but the move has drawn sharp criticism for both its legal footing and fiscal cost.
According to a Pentagon estimate presented to Congress, the deployment is expected to cost approximately $134 million over a 60-day period. This figure includes expenses related to housing, transportation, and food for the personnel involved.
Bryn Woollacott MacDonnell, a Pentagon official serving as a special assistant to the secretary of defense, shared the cost breakdown during testimony before a House subcommittee.
The funding for this operation is being drawn from the Department of Defense's Operations & Maintenance budget.
A total of 4,700 personnel have been activated as part of this mobilisation: 4,000 members of the California National Guard and 700 Marines.
Though Marines have yet to be seen actively engaged on the streets, the presence of National Guard troops — especially near federal buildings and ICE operations — has been confirmed.
US Secretary of Defence Pete Hegseth appeared before lawmakers to defend the decision, asserting that 'every American citizen deserves to live in a community that's safe, and ICE agents need to be able to do their job.'
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Hegseth argued that the 60-day deployment timeline was intentional: 'We stated very publicly that it's 60 days because we want to ensure that those rioters, looters and thugs on the other side assaulting our police officers know that we're not going anywhere.'
Hegseth also accused demonstrators of being in the country illegally and claimed the deployment was meant to protect law enforcement personnel who were being attacked.
Why Trump's decision is being brought to court
The troop deployment has exposed a significant clash between the federal executive branch and California's Democratic leadership. California Governor Gavin Newsom, a prominent critic of the Trump administration, has openly opposed the military presence in his state.
Speaking in a nationally televised address, Newsom described the moment as a 'war' being waged not just against protesters, but against the foundational principles of American democracy.
'California may be first, but it clearly will not end here. Other states are next. Democracy is next. Democracy is under assault before our eyes. This moment we have feared has arrived,' Newsom declared, warning that Trump's tactics reflect a larger attempt to centralise power in the White House and bypass the established norms of federalism.
Newsom further added, 'He's declared a war. A war on culture, on history, on science, on knowledge itself. He's delegitimising news organisations, and he's assaulting the First Amendment.'
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Asserting that 'it's time for all of us to stand up,' Newsom urged peaceful resistance while criticizing Trump's actions as fundamentally anti-democratic.
Simultaneously, California filed a legal challenge to the troop deployment, arguing that federal intervention in state matters without consent violates the principles of state sovereignty.
In response, a judge opted not to issue an immediate ruling, instead granting several days for the administration to continue its actions ahead of a scheduled hearing.
Adding to the friction, Trump claimed he had spoken to Newsom about the protests. The Governor disputed this directly on social media, writing: 'There was no call. Not even a voicemail.'
He added, 'Americans should be alarmed that a President deploying Marines onto our streets doesn't even know who he's talking to.'
Members of Congress, particularly Democrats, pressed the administration over the legal grounds for military deployment.
Representative Pete Aguilar cited federal law that allows presidential use of troops only under limited conditions such as foreign invasion, rebellion, or inability to enforce federal law using regular means. 'Which authority is triggered here to justify the use?' he asked.
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Hegseth responded vaguely: 'I don't know. You just read it yourself so people can listen themselves, but it sounds like all three to me.' He reiterated claims that demonstrators were undocumented and violent, though evidence of this was not independently confirmed during the hearing.
Representative Betty McCollum challenged why Marines were being sent to LA now when a similar response was not undertaken during the 2020 unrest in Minneapolis.
Hegseth defended the decision, referencing leadership requests: 'The police chief said she was overwhelmed, so we helped.' However, it remains unclear which official Hegseth was referring to.
LAPD Chief Jim McDonnell had earlier issued a statement expressing concern over the deployment, saying it complicated efforts to de-escalate tension and posed logistical challenges due to lack of coordination.
Will Taco Trump repeat himself?
Trump has not ruled out invoking the Insurrection Act, one of the most severe emergency powers available to a U.S. president. From the Oval Office, he said: 'If there's an insurrection, I would certainly invoke it. We'll see.'
Trump also stoked further controversy by appearing to support the idea of Newsom's arrest if he were to obstruct federal immigration enforcement. 'I think it's great. Gavin likes the publicity, but I think it would be a great thing,' the president told reporters.
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The broader context includes years of tension between Trump and California leadership, particularly Newsom. Trump has previously threatened to withhold wildfire aid, intervened in homelessness policy debates, and warned California residents that 'your children are in danger' due to illegal immigration.
His rhetoric often includes insults — calling the governor 'New-scum' — and incendiary policy declarations.
The recent protests, which began in response to ICE raids, have remained concentrated in downtown Los Angeles but are now being echoed in major cities across the US.
Reports of teargas and violent clashes, including the torching of vehicles and highway blockades, have only heightened national interest.
While Trump has so far stood firm on the military deployment, historical precedent suggests the possibility of a reversal.
The president's record — be it trade threats, economic tariffs, or even high-profile dismissals — shows a consistent pattern of retreat when faced with sustained opposition or political cost.
With inputs from agencies
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Edited Excerpts –Last one month we have seen a lot of volatility, the result being that Nifty has been range bound, moving in a zig-zag pattern and not finding a one-way is mostly because of mixed news coming in and out and investor sentiment undecided. While there are green shoots in corporate earnings, interest rates, inflation and growing demand, there are certain critical issues that still unrest and foreign fund inflows are still a matter of concern. In H2 2025, I think we can expect this lingering negativity to go away, if India inc. numbers continue to get better we will see a one-sided upward movement in the sectors like Infra, Health, BFSI will continue to grow and support the broader market. India while growing at 6.5% is still the most promising emerging market in the global economy and there is only upside from rate cut of 50 bps in their latest MPC meeting was more than what was expected on the street. Following that up with a cut in CRR ratio has ensured massive liquidity push in the credit we talk about the impact on the investment side, we have now seen a one-sided reduction in the repo rate of 100 bps since February 2025 that will have a positive impact on the bond prices as they are inversely proportionate to the interest are advising clients to look at short term bond funds and expect accrual income in the future. On the equity side, we are expecting a liquidity boost, due to fall in the interest rates and fixed deposits investors are most likely to deploy less funds in these liquidity may boost up equities. Our asset allocation strategy is to shift Debt investments from long term funds to short term funds while not increasing overall allocation to debt because we are expecting equities to outperform in h2 we review Q4 earnings, aggregate profit after tax (PAT) for BSE 500 companies grew by 10% Y-o-Y and by 9% for the full FY25. There was sluggish domestic consumption and limited government spending in the first half due to elections and a volatile geo-political was a big step down from a stellar performance in FY24 that saw a 30% growth. BFSI sector stood out, contributing 1.84 % to the GDP and posted improved all stakeholders in the sector, MNCs, Private firms, Small & Midcap companies performed well. Metals, Telecom, Chemicals and Cement also supported positively to the growth. Certain sectors that showed sluggishness were PSUs, Industrials and could see a turnaround, we expect the PAT growth to improve in most sectors on account of increase in demand and stability on the global trade tariff wars could see a conclusion and that should bring a much needed respite and decrease are bullish on BFSI which will continue to shine and have another good year, Agriculture and Defence is also looking to outshine in FY we discussed earlier, the BFSI sector has stood out in FY25 as an outperformer. Bank Nifty hit a record high in June following earnings growth numbers and a positive outlook for was more positive is that we saw broad based growth across all verticals in BFSI. Banking, Wealth, Insurance across small , mid and large cap companies saw increase in we look at number, on Y-o-Y basis, there was a 16% increase in PAT, 14% increase in Non-Interest Income, 13% increase in retail advance and 14% increase in MSME advances. These are very healthy numbers across the rate cuts by RBI has definitely helped banks by providing excess liquidity but is not the only reason fuelling this rally. RBI rate cuts were as recent as February but we have seen good numbers coming in all through FY factors supporting this rally are more on the fundamental side, most banks now have significant revenues coming in from non-interest activities such as wealth and insurance. They are high margin businesses with a huge growth still underserved and under penetrated when it comes to financial services; hence, there is a significant head are sitting on credible data and are able to convert their existing CASA customers by cross selling and thus increasing their revenue per the credit side, the growth cycle is strong and is expected to grow at 13-14% which should continue to support profits. NBFC's credit growth outpaced banks and will continue to do so in are bullish on BFSI, with the recent RBI rate cut we can expect strong liquidity. There is scope for penetration for financial services, credit growth is growing strong. Supported with slight improvement in demand, we should see this sector giving another strong are also taking positive calls on Defence fulled by governments efforts to have a self-sutainable defence industry and reduce the dependency on order pipeline here looks solid and defence production is projected to reach from Rs. 1.75 Trillion in FY25 to Rs. 3 Trillion in FY 29. The ministry of defence has already singed a record 193 contracts worth Rs. 2 of these 177 contracts were handed to domestic companies, this shows the governments commitment of making India a defence manufacturer in their own and related sectors are also looking bullish, policy support is on their side particularly in the areas of renewable energy and power infra companies will continue to benefit from India's growing infra need in Roads, Airports, Dams and our view, US trade talks were never a major factor for equity markets in India. Yes, they played a role for equity markets across the globe, but for India it never posed a very big was a lot of stir created early on when the tariff wars started but soon it was realised that it was more of a bargaining stunt to get the stakeholders on the table to negotiate rather than a permanent change of structure in the global trade only point of concern is FII inflow into our equity markets. While our DIIs have been a major support, we can't ignore the validation that comes from FIIs and the quantum of their capital that ensures Indian equities are in Talks create a little uncertainty that results in institutional money being kept at bay, that's the only relevant headwind I think that equity in recent times have outperformed all the other EMs. This is a little ironical seeing how the main target of US trade wars is China, and their companies are facing an uphill battle in case tariffs are increased substantially.I would still refrain from considering the Chinese stock market as an investment destination. The main reason being the opaqueness of the country and the dictatorial laws that can be brought down by the government onto the private of giving double digit returns, the 3-yr performance of China based Mutual funds is still as low as 2%.For global diversification I think US tech stocks are a better bet. With AI changing the face of computing, I think the biggest beneficiaries will US companies who are the biggest as well, US companies are at the center of every digital / computer revolution that has happened and I don't see why it should be any different Indian markets, I think one can be cautious while investing in Auto. FY25 saw a modest growth of 6.4% driven by passenger and two wheelers while the commercial vehicles growth remained have seen an impressive performance over last 24 months with increased sales across all verticals but going forward I think it's a little over the EV industry is giving the sector some headache, while most auto companies have installed EVE capacities, consumer acceptance of EV is not growing at a desirable has been slow and due to EV related lack of Infra it is not expected to pick up very soon. We are also expecting a cyclical slowdown in sales, only silver lining are the SUV sales which continue to grow but other passenger vehicles along with two wheelers are looking bleak.