"Tariffs will replace income tax"… Trump lauds himself in 108-minute State of the Union address

Source
Korea Economic Daily

Summary

  • President Trump said tariffs will substantially replace the current income tax system in the future.
  • He said that by relying on other statutory provisions instead of the International Emergency Economic Powers Act (IEEPA), tariffs going forward will be stronger than before.
  • President Trump said inflation has come down sharply, incomes are rising quickly, and the booming economy is running stronger than ever.
Photo=Shutterstock
Photo=Shutterstock

"America is bigger, better, richer, and stronger than ever."

U.S. President Donald Trump highlighted his achievements in his first State of the Union address delivered on the 24th (local time) at the U.S. Capitol. Calling it "America’s golden age," he boasted of the scale of the results from his past policies.

He argued that the tariff policy would become even tougher going forward despite the Supreme Court’s rulings that measures such as reciprocal tariffs are unconstitutional, and claimed that other countries want to keep the agreements they have signed with the United States.

"Tariffs will become even tougher"

On the ruling that reciprocal tariffs are illegal, President Trump said it was "a very regrettable decision," but added that "the good news is that nearly every country and company wants to keep the agreements already signed." He also said that "given the legal authority I have as president, striking new agreements could be much worse."

He said that, instead of the International Emergency Economic Powers Act (IEEPA), another statutory provision is a "proven alternative," and that tariffs going forward will be "stronger than before." He went on to say, "I think that over time, the tariffs paid by other countries will substantially replace the current income tax system."

This is a remark characteristic of President Trump, mixing exaggeration and falsehoods. In U.S. federal government revenue, the shares accounted for by individual income tax and corporate tax (FY 2026 basis) are 51.8% and 6.3%, respectively. Tariff revenue accounts for just 6.6%. Tariffs are borne not by foreign countries but by U.S. importers, yet President Trump has consistently framed them as "money paid by foreigners."

He focused on showcasing the fruits of the U.S. economic boom. President Trump said, "Inflation has come down sharply and incomes are rising quickly," adding that "the booming economy is running stronger than ever, and our enemies are afraid." The meaning of "enemies" is unclear, but it is interpreted as referring to China and others.

President Trump also said he had not "heard the secret words (received a pledge)" from Iran that it would "never possess nuclear weapons," stressing that "I prefer a diplomatic solution, but I will never allow the world’s leading state sponsor of terrorism to have nuclear weapons." He also said Iran has already developed missiles capable of threatening Europe and U.S. military bases overseas, and is trying to develop missiles that can reach the U.S. mainland.

In the speech, President Trump mentioned the Western Hemisphere but did not refer to China at all. There was also no mention of North Korea. He said, "We are restoring America’s security and dominance in the Western Hemisphere."

Resembled a MAGA rally

The address lasted a total of 108 minutes, breaking the previous record for the longest State of the Union set by then-President Bill Clinton in 2000 (1 hour 28 minutes 49 seconds). However, there were no new policies or agenda items, and it largely amounted to repeating his usual claims once again.

While U.S. presidents’ State of the Union addresses have often been occasions to seek bipartisan support, President Trump used it like a rally for his "Make America Great Again (MAGA)" base. He mocked Democratic lawmakers to their faces as "crazy people," drawing loud cheers from Republican leadership.

Republican lawmakers gave standing ovations throughout the speech and chanted "USA." It went so far as to involve repeatedly standing and sitting every few dozen seconds. Some lawmakers even wore MAGA hats. Democratic lawmakers did not respond. A divisive scene unfolded, split between half cheers and half silence.

Dozens of Democratic lawmakers boycotted the speech and attended alternative events. Even those in attendance sometimes walked out during the address in protest. Rep. Al Green (D-Texas) was escorted out after holding up a sign reading "Black people are not apes" in protest in front of President Trump. However, when the men’s hockey team that won the 2026 Milan–Cortina d’Ampezzo Winter Olympics entered, both parties stood and welcomed them with loud applause. The women’s hockey team, which also won, politely declined the invitation.

Four Supreme Court justices were also in attendance. Justice Brett Kavanaugh, who received high praise from President Trump for a legal opinion finding reciprocal tariffs lawful, and Chief Justice John Roberts, who sided with the ruling finding them unlawful, along with Justice Elena Kagan and Justice Amy Coney Barrett, sat in the front row in robes and listened to President Trump’s comments on tariffs.

Washington=Correspondent Lee Sang-eun selee@hankyung.com

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Korea Economic Daily

hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
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