Tariffs, cost of living, immigration, geopolitics... The heavyweight State of the Union address before the election, the market will closely watch Trump tomorrow morning

U.S. President Donald Trump will deliver a State of the Union address to a 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 seeks to alleviate public concerns about high living costs.

This speech comes at a time when the Supreme Court has overturned his core tariff policy, and the market is closely watching his latest statements on trade issues and potential countermeasures. Additionally, according to Global Times, the U.S. is conducting military mobilizations in the Middle East and assessing actions against Iran, making geopolitical risks a focal point for investors.

To respond to voter demands, Trump plans to announce several domestic new policies aimed at reducing living costs during the speech. According to The Wall Street Journal, this includes requiring tech giants to bear the high electricity costs associated with AI data centers themselves. These policy trends 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 promoting economic achievements and soothing public dissatisfaction. For investors, the policy signals released during this speech will set the tone for the market environment in the midterm election year.

Focusing on Living Costs and AI Electricity New Policies

According to The Wall Street Journal, White House officials revealed that the official theme of this speech is "250 Years of Nation-Building: Strength, Prosperity, and Respect." Trump's top advisors are encouraging him to focus on affordability issues.

In terms of specific policies, Trump is expected to formally announce the "Taxpayer Protection Commitment" reached through negotiations with major tech companies. This policy requires tech companies to bear the increased electricity costs in communities where new AI data centers are built. Trump will emphasize that these companies have committed to "paying for themselves" to prevent consumer electricity bills from skyrocketing.

Additionally, he plans to call on Congress to pass legislation that redirects federal healthcare subsidies from insurance companies to consumers. However, Republican interest in advancing this plan remains limited in the midterm election year.

Tariff Setbacks and Geopolitical Risks

Just days before Trump's speech, the U.S. Supreme Court recently rejected core elements of his tariff system, ruling that the government exceeded presidential authority by using emergency powers to impose broad tariffs without explicit congressional authorization.

This ruling has significantly hindered his trade agenda. According to The New York Times, despite facing resistance from the Supreme Court, Trump has turned to promote a new global tariff plan. The market will closely monitor alternative trade policies and their potential impact on global supply chains.

In terms of geopolitical issues, the backdrop of the speech is the U.S. military mobilization in the Middle East. Washington is currently negotiating with Tehran over a potential nuclear agreement, while Trump is also considering strikes against Iran. He is expected to elaborate on his diplomatic strategy of "achieving peace through strength" during the speech.

Economic Slowdown and Midterm Election Pressure

One of the major challenges facing Trump is how to praise the economic performance of the past year while not ignoring voters' concerns. Although inflation has cooled somewhat, government data released last week showed that U.S. economic growth slowed significantly at the end of last year.

Polls indicate that voter dissatisfaction with the current state of the economy is growing. According to the average poll tracked by the nonpartisan Cook Political Report, only 41% of voters currently approve of Trump's job performance, while 57% disapprove. Compared to a 2 percentage point gap in March of last year, the current negative gap has 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. Bipartisan political strategists warn that this frustration could translate into a loss of votes for the Republican Party in the November elections.

Border Security and Democratic Response

Despite facing resistance on multiple issues, border security remains one of Trump's widely recognized signature agendas. He will emphasize progress in border security and combating violent crime in his speech, citing the decline in murder rates in major U.S. cities as evidence of effective policy.

According to the Wall Street Journal, the speech was drafted by Trump's longtime speechwriter Ross Worthington, and Trump personally reviewed and made edits over the weekend. However, Trump often goes off-script during formal speeches, with his joint address to Congress last year lasting over 90 minutes.

After Trump's speech, Virginia Governor Abigail Spanberger will deliver the official Democratic response, and Senator Alex Padilla will provide a Spanish version of the response. Some Democrats plan to completely boycott the speech and instead attend a rally in Washington.

Risk Warning and Disclaimer

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