Tariffs, cost of living, immigration, geopolitics... The major State of the Nation address before the election; the market will closely watch Trump tomorrow morning.
U.S. President Trump will deliver his State of the Union address to the joint session of Congress at 10 a.m. Beijing time on Wednesday, February 25. Under the political pressure of this year’s midterm elections, he is trying to sell his economic achievements to voters and seek to alleviate ongoing public concerns over high living costs.
This speech comes as the Supreme Court has overturned his core tariff policies, and markets are closely watching for his latest stance on trade issues and potential countermeasures. In addition, according to Huanqiu.com reports, U.S. military deployments in the Middle East and assessments of potential actions against Iran have made geopolitical risks a major focus for investors.
To respond to voter demands, Trump plans to announce several new domestic policies aimed at lowering living costs during his speech. According to the Wall Street Journal, these include requiring tech giants to bear the high electricity costs incurred by AI data centers themselves. These policy moves are expected to directly impact market expectations in the technology, energy, and healthcare sectors.
Against the backdrop of slowing economic growth and declining approval ratings, this State of the Union address will force Trump to find a balance between touting economic achievements and appeasing public dissatisfaction. For investors, the policy signals released in this speech will set the tone for the midterm election year market environment.
Focus on Living Costs and New AI Electricity Policies
According to the Wall Street Journal, White House officials revealed that the official theme of the speech is “America’s 250th Anniversary: Strength, Prosperity, and Respect.” Trump’s top advisers have encouraged him to focus on affordability issues.
Regarding specific policies, Trump is expected to officially announce the “Taxpayer Protection Pledge” negotiated with large tech companies. This policy requires that in communities building new AI data centers, tech companies must bear the increased power costs themselves. Trump will emphasize that these companies have pledged to “pay their own way,” preventing consumer electricity bills from soaring.
In addition, he plans to call on Congress to pass legislation redirecting federal healthcare subsidies from insurance companies to consumers. However, Republican interest in advancing this plan during a midterm election year remains limited.
Tariff Setbacks and Geopolitical Risks
Just days before Trump's speech, the U.S. Supreme Court rejected the core elements of his tariff system, ruling that the government’s use of emergency powers to impose broad tariffs without explicit Congressional authorization exceeded the president's authority.
This ruling dealt a significant blow to his trade agenda. According to the New York Times, despite resistance from the Supreme Court, Trump has turned to promote a new global tariff plan. Markets will closely follow his alternative trade policies and their potential impact on global supply chains.
On the geopolitical front, the speech comes amid U.S. military buildup in the Middle East. Washington is currently negotiating with Tehran over a potential nuclear agreement, and Trump is also considering strikes against Iran. He is expected to specifically elaborate on his “peace through strength” foreign policy strategy during the speech.
Economic Slowdown and Midterm Election Pressures
One major challenge Trump faces is how to praise last year’s economic performance without ignoring voter concerns. Although inflation has cooled somewhat, government data released last week show U.S. economic growth slowed sharply at the end of last year.
Polls show that public dissatisfaction with the economic situation is intensifying. According to the average polls tracked by nonpartisan Cook Political Report, only 41% of voters currently approve of Trump’s performance, while 57% disapprove. Compared to the mere 2-point gap last March, the negative gap has now widened to 16 percentage points.
A Wall Street Journal poll last month indicated that most voters are dissatisfied with the president’s handling of the economy, immigration, tariffs, foreign policy, and healthcare. Political strategists from both parties warn this frustration could lead to Republican vote losses in the November elections.
Border Security and Democratic Response
Despite facing resistance on many issues, border security remains one of Trump's signature agenda items that enjoys broad support. He will highlight progress in border security and combating violent crime in his speech, citing the falling murder rate in major U.S. cities as evidence of policy effectiveness.
According to the Wall Street Journal, the speech was drafted by Trump’s longtime speechwriter Ross Worthington, with Trump personally reviewing and amending the draft over the weekend. However, Trump often goes off script during official speeches; his joint session address last year lasted over 90 minutes.
After Trump's speech, Virginia Governor Abigail Spanberger will deliver the official Democratic response, and Senator Alex Padilla will offer a Spanish-language version. Some Democrats plan to boycott the speech entirely and instead attend rallies held in Washington.
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