Tariffs, cost of living, immigration, geopolitics... The major national address before the election, markets will be closely watching Trump tomorrow morning.

U.S. President Donald Trump will deliver the 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 aims to promote his economic achievements to voters and seek to ease public concerns over the ongoing high cost of living.

This speech comes as the Supreme Court overturns his core tariff policies, and markets are closely watching his latest statements on trade issues and potential countermeasures. Additionally, according to Global Times, the U.S. is mobilizing military forces in the Middle East and assessing actions against Iran, making geopolitical risks a key focus for investors.

To respond to voter demands, Trump plans to announce several new domestic policies aimed at reducing living costs. According to The Wall Street Journal, these include requiring tech giants to bear the high electricity costs associated with AI data centers. These policy developments 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 will force Trump to balance promoting his economic record with calming public dissatisfaction. For investors, the policy signals from this speech will set the tone for the market environment in the midterm election year.

Focus on Living Costs and AI Electricity Policies

According to The Wall Street Journal, White House officials have revealed that the official theme of this speech is “Celebrating 250 Years of Nationhood: Strong, Prosperous, and Respected.” Trump’s top advisors are encouraging him to focus on affordability issues.

Regarding specific policies, Trump is expected to officially announce a “Taxpayer Protection Commitment” negotiated with major tech companies. This policy requires tech firms building new AI data centers in certain communities to cover the increased electricity costs themselves. Trump will emphasize that these companies have committed to “pay their own way” to prevent consumer electricity bills from soaring.

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

Tariff Setbacks and Geopolitical Risks

A few days before the speech, the Supreme Court recently rejected key elements of his tariff system, ruling that the government’s broad use of emergency powers to impose tariffs without explicit congressional authorization exceeded presidential authority.

This ruling dealt a significant blow to his trade agenda. According to The New York Times, despite the Supreme Court’s resistance, Trump has shifted to promote a new global tariff plan. Markets will closely watch for alternative trade policies and potential impacts on global supply chains.

On the geopolitical front, the speech is set against the backdrop of U.S. military mobilization in the Middle East. Currently, Washington is negotiating with Tehran over a potential nuclear deal, and Trump is also considering strikes against Iran. He is expected to specifically outline his “peace through strength” diplomatic strategy in the speech.

Economic Slowdown and Midterm Election Pressures

A major challenge for Trump is how to praise the economy’s performance over the past year without neglecting voters’ concerns. Although inflation has cooled, government data released last week shows that U.S. economic growth slowed significantly at the end of last year.

Polls indicate growing voter dissatisfaction with the economic situation. According to the nonpartisan Cook Political Report’s average polling, only 41% of voters approve of Trump’s job performance, while 57% disapprove. Compared to a 2-point gap in March last year, the current negative gap has widened to 16 points.

A recent Wall Street Journal poll found that most voters are dissatisfied with how the president has handled the economy, immigration, tariffs, foreign policy, and healthcare. Political strategists from both parties warn that these frustrations could translate into Republican vote losses in the November elections.

Border Security and Democratic Response

Despite resistance on many issues, border security remains one of Trump’s most widely recognized agendas. He will emphasize progress in border security and combating violent crime, citing the decline in murder rates in major U.S. cities as evidence of policy effectiveness.

According to The Wall Street Journal, the speech draft was led by Trump’s longtime speechwriter Ross Worthington, who reviewed and revised it over the weekend. However, Trump often goes off-script during speeches; his joint address to Congress last year lasted over 90 minutes.

After Trump’s speech, Virginia Governor Abigail Spanberger will deliver the Democratic Party’s official response, and Senator Alex Padilla will provide a Spanish-language version. Some Democrats plan to skip the speech entirely and instead attend a rally in Washington.

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