- President Donald Trump delivered his State of the Union address on Tuesday before a starkly divided Congress and country. His address came after a day in which markets around the globe whipsawed in response to Trump’s moves to advance tariffs on America’s closest geographical allies and trading partners, Canada and Mexico. Democrats protested with signs that read “false,” and one representative was removed from the House Chamber early in the address.
President Donald Trump announced that he will use tariffs as a cudgel against other countries after the U.S. has unfairly paid “tremendously higher tariffs” than other countries pay for goods.
“Now it’s our turn to start using them against other countries,” said Trump. He also warned that if Mexico and Canada take retaliatory stances, which both countries have pledged to do, the U.S. would respond in kind. He added that the U.S. would exact non-monetary tariffs if other countries try them.
After a volatile day with broad market swings in response to the new taxes, Trump claimed the tariff impact would be short lived.
“There will be a little disturbance but we’re OK with that—it won’t be much,” the President said.
Trump’s fifth address to Congress and his first in this presidency came amid rising fears that an international trade war could come to pass after Trump revealed 25% taxes on Mexican and Canadian imports. He spared Canadian energy by only imposing a tariff of 10%.
Mexico’s President Claudia Sheinbaum has vowed to impose retaliatory tariffs on the U.S. if Trump doesn’t relent. Roughly 80% of Mexico’s exports flow into the U.S. as part of $800 billion in trade and a storied alliance.
Similarly, Canadian Prime Minister Justin Trudeau pledged Canada would join the fray with a back-and-forth escalation of Canada’s own. Trudeau said America’s neighbor to the north would hit $100 billion in American goods with new taxes. Trudeau said the move was made with great reluctance. Trump has repeatedly threatened to make Canada part of the U.S., which has ignited anger in the region.
In response to the tariffs and widespread uncertainty, companies have set up war rooms to organize a response and to safeguard supply chains impacted by the sweeping new tariffs. Companies are relying on risk analysts and foreign policy experts to assess a slew of new enterprise risks and market volatility.
Democratic lawmakers arrived at the address with federal workers who recently lost their jobs in various purges engineered by Elon Musk’s Department of Government Efficiency (DOGE) and staff tasked with carrying out the mass firings while slashing funding for medical systems, aid programs, cancer and disease research, and other initiatives.
Musk was in the audience for the address and stood to be recognized when Trump introduced him.
“Thank you, Elon,” said Trump, as Musk smiled before Trump listed DOGE’s actions. The President said DOGE's moves were meant to reduce federal spending and claimed the savings would help Americans with high prices, rising interest rates, and inflation.
He later declared: “The days of rule by unelected bureaucrats are over.”
Trump pledged that tax cuts would be forthcoming and said his administration would seek “permanent income tax cuts all across the board.” He claimed taxes on tips, overtime, and social security disbursements would be eliminated and that interest payments on car loans tax would be deductible if the cars are manufactured in the U.S.
“We’ve accomplished more in 43 days than most administrations accomplished in four years or eight years,” said Trump, “and we are just getting started.”
