June 6 (Reuters) - Uncertainty from Washington's tariff tactics remains rife, but investors realise that whatever U.S. President Donald Trump threatens doesn't tend to last long before he delays or backs down, meaning recent volatility has ebbed.

This tendency to U-turn, dubbed the TACO trade - "Trump Always Chickens Out" - has caught on but it's also given investors something to bank on so they can focus on upcoming reads on inflation and trade.

Here's a look at what's coming up for world markets from Kevin Buckland in Tokyo, Naomi Rovnick and Amanda Cooper in London and Alden Bentley in New York.

1/ TACOS FOR BREAKFAST

The high-voltage volatility that shook markets in April and through May has subsided, with investors becoming accustomed to Trump's on-again-off-again approach to anything from tariffs to personal relationships - the meltdown with erstwhile DOGE chief and Tesla Chief Executive Elon Musk being the latest.

Wall Street's fear-gauge, the VIX index, has slipped back below the 20-line that many view as a watermark. Since Trump became the 47th president on January 20, the index has topped 20 on 47 occasions. In the five months prior to that, it breached that level 18 times. In the last month, there have been just seven days when the VIX has popped above 20, compared with every day from April 2 "Liberation Day" to early May.

If anything, the TACO trade is taking some spice out of the market.

2/ INFLATION HIDE AND SEEK

Investors are hoping any rise in Wednesday's May consumer inflation report won't be as severe as feared, given Trump's erratic trade tactics.

Recent data shows inflation falling close to the Federal Reserve's 2% target. Price pressures in manufacturing and services sectors are picking up, however.

A good gauge of markets' long-term inflation view indicates only moderate concern. The inflation breakeven rate on five-year Treasury Inflation Protected Securities US5YTIP=TWEB suggests investors believe the rate will average less than 0.3 percentage points above the target for the next five years.

The Fed's most recent Beige Book showed economic activity is weakening, while costs and prices are rising across the different regions - a combination policymakers do not want to see.

Traders expect the Fed to make no rate change at its June 18 meeting.

3/ A RARE DISPUTE

Washington and Beijing's trade spat has brought a familiar issue back to the surface.

China has a stranglehold on global supply of so-called rare earths, critical ingredients in almost every high-tech device out there, from cars to cruise missiles. When China cuts off supply, everything withers.

The auto industry is feeling it. Suzuki 7269.T suspended production of the Swift subcompact, weeks after Ford F.N did the same for its Explorer SUV.

The White House has blasted Beijing for reneging on tariff rollbacks agreed in Geneva last month, but China is doing the same, lambasting the U.S. over revoked student visas and cutting-edge chip curbs.

Chinese trade data on Monday will illuminate what's at stake, while inflation figures that day will show if Beijing's efforts to stoke domestic demand are working.

4/ A NICE BALANCE

April data trade data for the European Union on June 13 could offer a reasonably clean read on where things stood as Trump's on-off tariffs began to roll out.

The EU is firmly in the U.S. president's crosshairs. Trump has said more than once the sole purpose of the EU is to "take advantage" of America, on the grounds that his country boasts a $200 billion trade deficit with the bloc in goods alone, making the EU its second-biggest goods trade partner behind China.

EU sales of cars, steel, pharmaceuticals and luxury goods and apparel among other things are big business. Trump on May 23 said he would impose a 50% tariff on all EU imports, only to back down two days later by delaying the duties by a month after a "very nice call" with European Commission President Ursula von der Leyen.

5/ TAX OR OFFEND

Britain, often a prime target for bond vigilantes that attack indebted governments for financial mismanagement, has been pushed into these traders' peripheral vision by U.S. budget concerns.

The Labour government's first spending review on Wednesday could bring the UK back into the spotlight.

Even if finance minister Rachel Reeves manages to slash departmental spending, this will merely highlight how few cost-cutting options she has left, Bank of America says.

UK public debt has swelled, leaving Reeves minimal headroom to avoid breaking self-imposed fiscal rules and less able to resist tax hikes.

Still, businesses and borrowers still scarred by the gilt market riot after then Prime Minister Liz Truss' 2022 mini-budget may prefer higher taxes if that lowers the odds of bond vigilantes showing up.

(Compiled by Amanda Cooper, graphics by Vineet Sachdev; editing by Dhara Ranasinghe and Susan Fenton)

((amanda.cooper@thomsonreuters.com; +442031978531; Bluesky: @acoops.bsky.social))