On Tuesday, President Donald Trump delivered his first State of the Union Address of his second tenure. Washington was still digesting the major reset of trade policy as well as a more uncertain global landscape.
Trump will use his address, which comes just days after the Supreme Court ruled against most of the emergency tariffs he imposed, to show that the United States is now stronger and tougher. He’ll also lay the foundation for the next steps.
The subtext for markets and voters is the same: Where does he move from here?
Economy: A bold boast
Trump will likely highlight the jobs and investment, as well as that US economic growth is still durable. However, many Americans are feeling squeezed because of high prices.
The President will likely try to use the economic situation as a way of proving that he has a successful policy and any pain that remains is merely lingering from previous years.
If the tone of the White House speech is too confident, the voters may not be convinced.
Tariffs – the elephant in chamber
The most sensitive part of the evening will be trade because Trump’s trademark tool has changed the legal landscape.
Trump will likely attack the Supreme Court ruling that limited his power to impose tariffs on a large scale under emergency powers.
A new global 10% tariff came into force just after midnight on Tuesday. This means that the speech is going to be delivered with the businesses and trading partners already having recalculated costs.
He could also take this opportunity to suggest alternative tariff policies.
After the ruling by the Court, the White House will consider new tariffs for “national security”. Investors should be on the lookout for another wave of surprises in policy, even though the legal route was limited.
Immigration: familiar messaging and higher stakes
Trump will likely return to the script that has served him well: border enforcement and security. He’ll also use anecdotes to bring home his point.
His rhetoric on immigration is usually short and repeatable, designed to fit into campaign advertisements or clips.
The political environment is different: policy whiplash has already become a factor in the market, and the White House wants to portray control instead of chaos.
Iran and National Security: No Specifics
Deterrence, and especially leverage towards Iran is the focus of foreign policy.
Trump said recently that he was “considering”, but provided few details, a limited strike against Iran.
Trump has warned that “bad things” will happen if Iran doesn’t make a deal. According to reports, a second US air carrier is nearing the area.
Watch to see if Trump clarifies his threshold of action, or leaves it vague intentionally in order to increase pressure.
State of the Union addresses rarely change people’s minds in a single day.
They often reveal Trump’s priorities. This one will show him navigating a new tariff environment after the ruling, while still keeping his supporters energized.
As new information becomes available, this post Trump’s State of the Union Address: Here’s What to Expect may change.
