Tariffs will replace income tax, will take burden off Americans: Trump

US President Donald Trump on Tuesday (local time) delivered the first State of the Union address of his second term, offering a forceful defence of his economic, trade and immigration policies ahead of the November midterm elections.

A central theme of his address was trade and tariffs. Trump reiterated his long-standing belief that tariffs paid by foreign countries could eventually replace the modern income tax system.

“As time goes by, I believe that 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,” he said.

Trump described a recent Supreme Court ruling on tariffs as “unfortunate”, but insisted his tariff regime was saving and protecting the country. He argued that the policy was generating significant revenue for the United States and preventing other nations from “earning at the expense of America.” Notably, he made the remarks in the presence of Supreme Court justices attending the address.

He further claimed that several countries and corporations that had signed trade agreements with Washington wanted those deals to continue despite the court’s involvement, warning that any future agreement could be “far worse for them.”

Addressing a joint session of Congress at the US Capitol in Washington, DC, Trump declared that “the state of our Union is strong” and portrayed a nation he said was thriving under his leadership.

“Our nation is back, bigger, better, richer and stronger than ever before,” he said. “You’ve seen nothing yet. We’re going to do better and better and better. This is the Golden Age of America.”

Push for voter ID law

During the address, Trump called on lawmakers to pass the 'SAVE America Act', which he said would prevent undocumented immigrants from voting in US elections.

“It’s simple, every voter must show an ID proving they are a citizen in order to vote,” he said.

Immigration and border security

Turning to immigration, Trump said his administration had delivered what he called the “most secure border in the history of America.”

“In the past nine months, zero illegal immigrants have been admitted into the United States,” he claimed, while adding that the country would continue to welcome those who enter legally and contribute to national development.

He also said the flow of fentanyl into the US had fallen by 56 per cent over the past year, describing it as a record low.

Inflation, jobs and energy

Trump sharply criticised the previous administration, blaming it for high inflation and what he termed a “housing disaster.” He said inflation had fallen to 1.7 per cent last month under his leadership.

Gasoline prices, he said, had dropped below $2 a gallon, mortgage rates were falling rapidly and the annual cost of a typical mortgage had declined by nearly $5,000 over the past year.

“Low interest rates will solve the housing disaster,” he said.

Highlighting job creation, Trump said 70,000 new jobs had been created in a short span, with all recent job growth coming from the private sector. He added that American oil production had increased by more than 600,000 barrels a day, while natural gas output had reached an all-time high.

“I kept my promise, drill, baby, drill,” Trump said.

He also noted that the United States had received more than 80 million barrels of oil from Venezuela, which he described as a “new friend and partner.”

Domestic policy and welfare

Trump said his administration had ended Diversity, Equity and Inclusion (DEI) initiatives across federal institutions. He also claimed that 2.4 million Americans had been lifted off food stamps, calling it a record shift toward workforce participation.

Trump said: “Our country is winning again, to an extent we don’t even know what to do with it.”