Tariffs, TACO, and the 2026 Stock Market

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Look, let’s be real. If the President decided to replace the White House staff with a troupe of trained capybaras, the market would barely blink. A gold-plated escalator to nowhere? No problem. But tariffs? Those are…different. They’re less “eccentric billionaire’s whim” and more “directly impacts corporate earnings,” which, shockingly, investors do care about. It’s like the difference between a quirky outfit and a structural flaw in the building.

So, will President Trump’s tariffs cause the stock market to crash in 2026? Well, buckle up, because it’s less a straight line and more a…squiggly line with occasional spikes. And a lot of acronyms, apparently.

So Far, So…Manageable

The good news is, the tariff apocalypse hasn’t happened yet. A year into the second Trump administration, the market’s managed to stay upright, which, given the sheer volume of pronouncements coming out of Washington, is frankly astonishing. Last April’s “Liberation Day” tariff announcement did send the S&P 500 (^GSPC +0.03%) into a brief existential crisis, but it recovered. The S&P actually finished 2025 up 16%. Which, honestly, feels like a plot twist in a particularly stressful reality TV show.

Investors have been remarkably chill about all this, for a few reasons. First, the President has a habit of announcing tariffs and then…not fully implementing them. It’s like promising a full-course meal and then delivering a breadstick. He even lifted tariffs on some food imports when grocery prices started to resemble ransom demands. Then, there’s “TACO”—Trump Always Chickens Out—a term Wall Street analysts apparently coined. It’s the kind of thing that makes you wonder if they have too much time on their hands, or if they’re just really good at spotting patterns.

Companies also started stockpiling imported goods before the tariffs hit, which is basically corporate pre-emptive self-preservation. It’s like preparing for a zombie apocalypse, except the zombies are trade disputes. This created a temporary buffer, but, as anyone who’s ever tried to survive on canned goods knows, buffers don’t last forever. And, surprisingly, many companies absorbed the increased costs instead of passing them on to consumers. It’s a testament to their faith in…something. Brand loyalty? A desperate hope for a tax break?

What Could Change in 2026 (and Why We’re All Slightly Panicked)

Here’s where things get interesting, and by “interesting,” I mean potentially disastrous. The temporary fixes are starting to wear off. That stockpiling thing? It’s not going to help this year. Companies are going to start passing those costs on to consumers, and that’s when things get…sticky.

BlackRock (BLK 0.86%) thinks so, and frankly, they usually have a pretty good read on these things. If inflation picks up, the Federal Reserve will be less inclined to cut interest rates, which is like trying to put out a fire with a water pistol. It’s just not going to work.

Morningstar (MORN 1.45%) agrees. They’re predicting a price hike for American consumers, which, let’s be honest, we’ve all been bracing for. It’s like waiting for the other shoe to drop, except the shoe is a 15% surcharge on everything.

And then there’s Greenland. Don’t even get me started on Greenland. The President’s fascination with acquiring it is…a choice. He backed off, for now, but the threat still looms. Some analysts are now suggesting “TATA”—Trump Always Tries Again—is a more accurate acronym. It’s like Groundhog Day, except with international trade and potentially destabilizing geopolitical consequences.

Is a Stock Market Crash Imminent? (Probably Not, But Don’t Bet the Farm)

Look, a full-blown stock market crash isn’t a foregone conclusion. The President could decide to de-escalate things, or the ongoing generative AI boom could provide enough of a tailwind to offset any negative effects. But tariffs will create uncertainty, and investors hate uncertainty. It’s like asking them to choose between two equally terrible options.

So, will tariffs crash the market in 2026? Probably not on their own. But they’re definitely adding another layer of complexity to an already volatile situation. It’s like trying to juggle flaming chainsaws while riding a unicycle. It might work, but it’s probably not a good idea.

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2026-01-25 12:53