WASHINGTON — President Donald Trump used his longest-ever State of the Union address to tout his economic, foreign policy, and immigration achievements, declaring that tariff revenues would replace income taxes while sparing Americans from tax increases.
Trump claimed tariffs are paid by foreign countries, though economists note the costs fall on importing U.S. companies.
In his first congressional address since beginning his second term on Tuesday, Trump addressed the recent Supreme Court ruling against his tariff authority.
"The Supreme Court decision is very unfortunate, but the good news is that almost every country and company wants to maintain agreements already reached," Trump said. "They know I have the legal authority as president to impose far worse deals on other countries."
"The new system may be more complex, but ultimately it will be more durable and stronger," Trump added. "Over time, tariffs paid by foreign countries will effectively replace the income tax system as before, relieving the financial burden on our people."
Following court rulings against tariffs based on the International Emergency Economic Powers Act, Trump has begun imposing 10% tariffs globally under Section 122 of the Trade Act. He plans to expand use of Section 232 of the Trade Expansion Act and Section 301 of the Trade Act, both of which have faced no legal challenges to date.
In the most recent fiscal year, U.S. income tax revenue reached $2.6 trillion—more than 13 times tariff revenue of $195 billion. The New York Times noted that "replacing income tax with tariffs is mathematically impossible," while Axios called the speech "a reaffirmation of his commitment to tariffs as a core economic policy."
Iran Warning
On Iran, Trump said the country "has already developed missiles capable of threatening Europe and U.S. military bases abroad, and is now working on missiles that can reach the American homeland."
"The Iranian government has killed 32,000 of its own people. They must not be allowed to have nuclear weapons," Trump said. "We are negotiating with Iran, but I have not yet heard them say they will give up nuclear weapons. I prefer diplomatic solutions, but I will never hesitate to confront threats against America."
The U.S. and Iran are scheduled to hold nuclear talks in Geneva, Switzerland on the 26th.
Economic Policy Highlights
During his record 108-minute address, Trump spent considerable time listing economic achievements including last year's congressional tax cuts, prescription drug price reductions, and healthcare reform.
With residential electricity costs rising due to proliferating data centers, Trump pledged to require tech companies to power their AI data centers with their own generation facilities. He also announced that starting next year, the government would provide up to $1,000 in matching savings for workers unable to enroll in 401(k) retirement plans.
The Wall Street Journal observed that "Trump spoke of an economic recovery that many voters do not recognize," noting he "did not say 'I feel your pain.'"
Sharp Criticism of Democrats
Trump devoted significant time to attacking Democrats. "Republicans passed the largest tax cut in history through Congress last year, but every Democrat voted against it. They wanted massive tax increases to hurt the people," he said.
He called Democrats who refused to applaud his remarks on crime, immigration, and economic policy "sick," adding they are "destroying our country."
As Trump entered the chamber, Rep. Al Green (D-Texas) caused a disruption by holding a sign reading "Black people are not monkeys." Dozens of Democratic lawmakers boycotted the address.
