Introduction
US President Donald Trump delivered his State of the Union (SOTU) address, emphasizing economic policies and the current state of the nation, asserting that the US is flourishing like never before. The address comes amidst declining approval ratings for Trump and challenges from the Democrat opposition.
State of the Union Address Highlights
Affordability & Welfare
- Inflation: Trump highlighted the reduction of inflation from 9.1% in June 2022 to below 3% by the time of his election victory.
- Interest Rates: Mentioned recent Federal Reserve actions that lowered interest rates, improving mortgage affordability.
- Tax Cuts: Introduced the "One Big Beautiful Act" featuring significant tax cuts, including no tax on tips, overtime, or Social Security for senior citizens.
- Healthcare Plan: The "Great Health Care Plan" aims to offer prescription drugs at low prices globally.
- Trump Accounts: Tax-free investment accounts for children, expected to grow to over $100,000 by adulthood with minimal contributions.
Economic Output and Growth
- Claimed US economic resurgence post-Biden, with the economy labeled as "hottest."
- Despite growth, GDP growth rate moderated in 2025, blamed on a government shutdown by Democrats.
- Oil Production: Increased by over 600,000 barrels a day, with gasoline prices lowered from $6 to below $2.30 per gallon.
Employment
- Employment growth noted but not accompanied by significant job creation due to low hiring and firing rates.
- Job vacancies almost double the unemployed rate during periods of high economic growth.
- Service sector jobs, particularly in health and education, increased by 773,000 in 2025, while manufacturing jobs declined by 83,000.
Tariffs
- Despite a Supreme Court ruling against many of his tariffs, Trump continued to champion them for securing trade deals.
- Tariffs were argued as a potential future alternative to income tax, despite their lesser revenue contribution ($200 billion versus $2.7 trillion from income tax).
Conclusion
Trump's policies, while aimed at economic revitalization, face scrutiny regarding their long-term effectiveness and impact. The address served as an opportunity for Trump to reassure the public amid political challenges and potential implications for upcoming elections.
