MW Did Trump just TACO on China? Nvidia's stock and China ADRs are flashing a signal.

By Robert Schroeder

Treasury Secretary Scott Bessent's comments and news of the resumption of H20 chip sales to China have excited Wall Street

Nvidia's stock and Chinese ADRs may be telling a TACO tale.

Shares of the chip maker (NVDA) are surging Tuesday following a favorable China-related announcement from the Trump administration, and a key index of Chinese stocks is in the green amid pronouncements that talks between the world's largest economies are in a "very good place."

That characterization came from Treasury Secretary Scott Bessent, who dropped a key line in a Bloomberg Television interview about negotiations with China - namely, that investors shouldn't worry about an approaching deadline to reach a deal.

See: Bessent drops a key line about trade deadlines that investors should pay attention to

Do these developments amount to part of what's become known as the "TACO" trade? That's the shorthand on Wall Street for "Trump always chickens out" - or the way markets have sunk on tariff threats but then rebounded when the president relents.

Trump has rejected the TACO label. But in his comments, Bessent made clear that a deal with China is more important than a deadline.

"I tell market participants not to worry about Aug. 12," he said, referring to the end of a 90-day tariff truce between the two trade superpowers that was announced on May 12.

An index of Chinese American depositary receipts was up about 2.7% in late morning trading.

Shares of Nvidia, meanwhile, were soaring higher Tuesday, following the company's announcement Monday evening that it is filing applications with the U.S. government to sell its H20 chips in China again. The company now expects it will be allowed to sell its H20 chips to China, together with a new artificial-intelligence chip that will comply with export controls. That comes after the Trump administration essentially banned the sale of H20 chips to China in April.

Tech stocks: Nvidia's stock pops as China win may pave the way for $5 trillion market cap and beyond

Bessent has also rejected the TACO term, and said that the granting of licenses such as Nvidia's was all part of trade-talk tactics.

"You might say that that was a negotiating chip that we used in Geneva and in London," he told Bloomberg TV. "It was all part of a mosaic. They had things we wanted. We had things they wanted, and we're in a very good place."

-Robert Schroeder

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July 15, 2025 11:56 ET (15:56 GMT)

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