At this point, the so-called TACO trade has become a well-worn meme. A pejorative that stands for "Trump Always Chickens Out," it describes the tendency of President Donald Trump to first issue a stern warning, then later walk back his own threats. This time around, Southern Copper Corp (NYSE:SCCO) has felt the immediate impact of the policy whiplash. Still, despite the political drama, SCCO stock could make for an intriguing idea for contrarians.
Initially, the Trump administration's policies were supportive of rising share prices in domestic copper-focused enterprises. Early last month, the White House announced a surprise 50% import tariff on the key industrial metal — a dramatic boost from the 25% tariff announced previously. The shot fired across the bow sent demand surging for U.S. copper, which created an unusual arbitrage, with domestic prices reaching an over 25% premium relative to global prices.
