How To Set Variables in MySQL Update Trigger
How about ...

drop trigger if exists Update_estimate_from_line_items;
delimiter //

CREATE TRIGGER Update_estimate_from_line_items
AFTER UPDATE
   ON estimate_line_items FOR EACH ROW

BEGIN

   -- variable declarations
   DECLARE vPrev_amnt INT;
   DECLARE vNew_amnt INT;
   DECLARE nDiff INT;


   SET vPrev_amnt = OLD.price * OLD.quantity;
   SET vNew_amnt = NEW.price * NEW.quantity;
   SET nDiff = vNew_amnt - vPrev_amnt;  -- names amended

   -- trigger code
   UPDATE estimates SET 
     subtotal = total + nDiff
   , total = subtotal + (tax_rate/100 * subtotal)
   WHERE estimate_id = NEW.estimate_id;  

END//

delimiter ;