State of the Union: What to Know About Tariffs, Data Centers, and Jobs

Days after a Supreme Court defeat on trade, the president vowed to keep his tariff agenda alive and insisted his economic policies are working.

BY MELISSA ANGELL, SENIOR STAFF WRITER @MELISSKAWRITES

Donald Trump. Photo: Getty Images

President Donald Trump used a significant portion of his State of the Union address to defend his tariff agenda, tout tax cuts, and make the case that his economic policies are lowering costs for American families.

Clocking in at 108 minutes, the speech beat out last year’s address as the longest on record.

Trump called the Supreme Court’s ruling against his tariffs “unfortunate”, and doubled down on his trade agenda, saying the administration would pursue tariffs through alternative legal authorities. He repeated a claim that tariffs could one day replace the income tax entirely.

“As time goes by, I believe the tariffs paid for by foreign countries will, like in the past, substantially replace the modern day system of income tax, taking a great financial burden off the people that I love,” Trump said. Many trade economists are skeptical of that argument, and note that it is domestic importers, not foreign nations, that pay the cost of tariffs.

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Trump pointed to falling inflation as evidence his policies are working, saying household incomes are rising. While inflation has dropped to 2.4 percent, slightly above the Federal Reserve’s two percent target, wage growth remains modest, due in part to high child care and health care costs. Prices on many goods also remain elevated after a year of tariff policy, with the Tax Foundation estimating the tariffs amounted to roughly a $1,000 cost increase per American household.

Trump also championed Trump Accounts, new investment accounts for children created under last year’s tax legislation. He singled out Michael and Susan Dell, who donated $6.25 billion to fund the accounts, and Brad Gerstner, the CEO of Altimeter Capital, who helped spearhead the initiative.

On jobs, Trump touted private sector hiring as a signature achievement, though the overall picture is more complicated. The economy added 181,000 jobs in 2025, according to the Bureau of Labor Statistics, well below the 1.4 million added in 2024. Federal workforce reductions offset some private sector gains as hiring slowed broadly across the economy.

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