A Guide to the State of Trump and the Union

0:01Josh Wingrove:The news doesn't stop on the weekends. Context changes constantly. And now Bloomberg is the place to stay on top of it all. Hi, I'm David Gura. Join us every Saturday and Sunday for the new Bloomberg This Weekend. I'm Christina Ruffini. We'll bring you the latest headlines, in-depth analysis and big interviews. All the stories that hit home on your days off. And I'm Lisa Mateo. Watch and listen to Bloomberg This Weekend for thoughtful, enlightening conversations about business, lifestyle, people and culture. On Saturday mornings, we put the past week's events into context, examining what happened in the markets and the world.

0:35Josh Wingrove:Then on Sundays, we speak with journalists, columnists, and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television, listen on Bloomberg Radio, stream the show live on the Bloomberg Business app, or listen to the podcast. That's Bloomberg this weekend, Saturdays and Sundays, starting at 7 a.m. Eastern on February 28th. Make us part of your weekend routine on Bloomberg Television, radio, and wherever you get your podcasts.

1:28Josh Wingrove:It makes for some pretty entertaining episodes. Listen to Legally Brunette on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. The social media trend is landing some Gen Zers in jail. The progressive media darling whose public meltdown got her fired. And the massive TikTok boycott against Target that actually makes no sense. You won't hear about these online stories in the mainstream media. You can keep up with them and all the other entertaining and outrageous things happening online, in media and in politics with the Bread vs. Everyone podcast. Listen to the Bread vs. Everyone podcast on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts.

2:10Josh Wingrove:Bloomberg Audio Studios. Podcasts. Radio. News. Tonight, President Donald Trump will deliver his first State of the Union of his second term to a joint session of Congress. Members of the Supreme Court are also usually in the audience, and that will give President Trump an opportunity to speak to them directly, just days after the high court decided to strike down a big part of the president's tariff policy. The Supreme Court's ruling on tariffs is deeply disappointing, And I'm ashamed of certain members of the court, absolutely ashamed for not having the courage to do what's right for our country.

2:52Josh Wingrove:That was Trump reacting to the ruling on Friday. His response has evolved since then. Most recently, he's pledged sweeping global tariffs of 15 percent using other legal justifications. And as the fallout from the Supreme Court decision spreads, Bloomberg White House reporter Josh Wingrove tells me it's expected to dominate Trump's speech.

3:13David Gura:I think we're going to hear a lot about it. I think that's what I'll start with. I think he will talk, no doubt, about the investment pledges that have come in in his term that he says are driving this golden age. Sort of the flip side of that is that some of those are tied to trade deals and now have a lot of uncertainty around them.

3:31Josh Wingrove:But of course, tariffs are not the only issue Trump is likely to address. Josh says there's a lot on Americans' minds.

3:39David Gura:Voters want right now action on prices, immigration in particular, after the killing of Alex Preddy and Renee Good in Minneapolis.

3:46Josh Wingrove:Josh says those are subjects Trump may steer away from.

3:49David Gura:Trump likes to tell habitually, he likes to tell positive stories, does not like to admit defeat, you know, in any case. But there are warning signs flashing. Heading into the midterm cycle here, Trump himself is really anxious to hold the House because he thinks he's going to get impeached if they don't. And so that's why the stakes, I think, are pretty high for him personally and politically in this one.

4:15Josh Wingrove:I'm David Gura, and this is The Big Take from Bloomberg News. Today on the show, how President Trump is expected to use this State of the Union to rally his party and what issues he's likely to address amid lower approval numbers and tensions in the U.S. and around the world.

4:36Josh Wingrove:President Trump was workshopping his State of the Union last week in a speech he delivered at a steel plant in Rome, Georgia. We had record inflation. You don't have it anymore. I'm going to make a State of the Union address on Tuesday. I hope you're going to watch. And we're going to be talking about it. But Bloomberg's Josh Wingrove says the focus of the State of the Union changed after the Supreme Court struck down many of the tariffs President Trump had put in place.

5:01David Gura:Trump has been pressuring the court for months against this decision. And he's sort of been tweeting through it, as we all do, you know, from time to time, in the days since then, sort of riffing, saying, well, the court actually gave me even more power than they intended. And other countries better not renege on their trade deals because of this, or I'll go even bigger. but it's been very chaotic. What that court ruling did was strike down really the key leg of the stool of Trump's tariff policy, the reciprocal tariffs on basically every nation on earth, or at least many, many, many of them, as well as the fentanyl-related tariffs on China, Canada, and Mexico.

5:39David Gura:And Trump is trying to sort of rebuild Humpty Dumpty through a different sort of series of authorities that will take time, but it's been very ad hoc. It's been unclear over the weekend, he announced that he would increase a tariff from a level set not even 24 hours before, for instance. And so I think we will hear him riff and probably rage about this ruling, which he thinks really undercuts his authority. Of course, it is a 6-3 conservative Supreme Court that ruled 6-3 against his interpretation of that. So he's wrong in their eyes. But I think the question is, what is the follow-up of this?

6:14David Gura:The European Union, for instance, has moved to pause implementation of the trade deal as this tariff chaos swirls. If you're the Canadians and Mexicans waiting to renegotiate the USMCA trade deal, which is an actual trade deal on the books in law, this probably changes your calculus on it. If you are the Koreans and Japanese who are on the hook for hundreds of billions of dollars in financing and pledges, I think you are looking at this landscape wondering whether you should change tack a little bit or more than a little You know, so I think Trump's sort of entire philosophy, economic growth philosophy is built on tariffs, both the sort of leverage he gets from them in negotiations and the domestic investment he believes that they drive.

6:53David Gura:And so the court ruling is going to hang over all of this. So we will hear about it. Remember, Trump, of course, often goes heavily off script in speeches. And so that is the real X factor heading in to this evening is how much will he deviate from the prepared text? You can almost always tell whether he's doing it or not. And I think when he goes off script, that's when we're going to hear a lot about the tariffs.

7:12Josh Wingrove:So that'll be a big part of this. I imagine foreign policy will be as well. And we have President Trump at this moment deciding whether or not to attack Iran. What do we know at this point about what he's considering, what the president's weighing?

7:24David Gura:Trump has acknowledged that he's considering, you know, a direct intervention beyond where they've been before. In other words, more than just sort of a one and done bombing run. But it's hard to take what they're saying at face value because since the previous strike, which of course Trump insisted several different ways, completely decimated the Iranian nuclear capability. Of course, there are questions about whether that was actually the case and whether Iran has the ability to sort of restart things in a more quick way than President Trump had stated after the last attack. Now, this is one of the really sort of ongoing tensions in the MAGA movement about whether, you know, foreign interventions like this are worth it.

8:04David Gura:There is definitely an isolationist camp that does not want to get bogged down in foreign conflicts. And Trump, on the flip side, often sort of quick in and out type operations, as we, of course, saw with Iran, but we saw with Venezuela as well. Now, Trump likes to sort of leave the dagger hanging a little bit in these negotiations all the time. So it's difficult to read one way or another. But right now he's leaving a lot of options on the table, including the direct American military involvement in Iran.

8:33Josh Wingrove:So that dagger is hanging, as you say. And then you've got Steve Witkoff, the president's close advisor, his son-in-law, Jared Kushner, pursuing this diplomatic track as well. Is it clear to you what the goals are on that track, what those two men are trying to find an agreement on, perhaps to forestall this military action?

8:51David Gura:I think Trump wants a deal of some kind. Beyond that, it's not clear to me what they're willing to barter, if anything, and what they're demanding, if anything. They've stopped short of calling for outright regime change, or at least Trump has. And by the way, that is a backdrop to the tariff discussion, it's a backdrop to foreign affairs. Trump thinks that he benefits from this chaos and from this opaque sort of will he or won't he uncertainty, you know, that hangs over so much of his agenda.

9:24Josh Wingrove:This speech comes on the fourth anniversary of Russia's invasion of Ukraine. And I'm curious what the White House has indicated the president might say about that. Of course, that's another diplomatic track that Steve Witkoff is on right now, trying to find some resolution to that conflict.

9:38David Gura:Yeah, Trump has been frustrated by the lack of a resolution there and occasionally sort of let slip that he seems frustrated with Putin himself. Of course, Putin continues to dangle the prospect, or at least to Trump dangle the prospect of some kind of deal while continuing and even ramping up attacks both on the lines of battle in Ukraine, but also missile strikes on Ukrainian cities well behind those lines. And so I think right now Trump has been distancing himself from that conflict and distancing his political sort of stake from whether there'll be a deal or won't be a deal. And that's a big question mark and concern for the Europeans broadly and Ukraine specifically as to whether American arms shipments will continue at what level, at what price, whether American pressure on Russia will continue and with what fervor.

10:25David Gura:And so if we hear mention of it, I don't think we're going to hear a fresh call. I've been wrong before, David. I expect to be wrong, maybe. But there's no sign that he's preparing a fresh push. He seems to, frankly, on the flip side, be tiring of the back and forth from it. Not walking away entirely from trying to get a deal, but more and more disinterested, he seems, in the to and fro.

10:50Josh Wingrove:Coming up, how Trump is expected to address affordability. the latest economic data and the midterm elections.

11:23Josh Wingrove:as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube or wherever you get your podcasts.

12:03Josh Wingrove:Hey everyone, it's Emily Simpson and Shane Simpson from the Legally Brunette podcast. Each week we're bringing you true crime through a legal lens. Whether you want all the facts on the disappearance of Nancy Guthrie or you still need to wrap your head around the ditty verdict, we're breaking it all down step by step. And we're not just lawyers, we're also husband and wife. It makes for some pretty entertaining episodes. Listen to Legally Brunette on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. The social media trend that's landing some Gen Zers in jail.

12:40Josh Wingrove:The progressive media darling whose public meltdown got her fired. I'm going to take Francesco off the network entirely. The massive TikTok boycott against Target that makes no actual sense. I will continue getting stuff from Target, and I will continue to not pay for it. And the MAGA influencers whose trip to the White House ended in embarrassment. So refreshing to have the press secretary after the last few years who's both intelligent and articulate. You won't hear about these online stories in the mainstream media, but you can keep up with them and all the other entertaining and outrageous things happening online, in media, and in politics with the Brad vs.

13:13Josh Wingrove:Everyone podcast, hosted by me, Brad Palumbo. Every day of the week, I bring you on a wild ride through the most Delulu takes on the internet, criticizing the extremes of both sides from an independent perspective. Join in on the insanity and listen to the Brad vs. Everyone podcast on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

13:38Josh Wingrove:Josh, going back to that speech the president gave in Rome, Georgia, he declared, I've won affordability. What word have you not heard over the last two weeks? Affordability. Because I've won. I've won affordability. Is this the White House position now when it comes to that issue of cost of living of affordability?

13:57David Gura:Yeah, so he's called affordability a hoax in the past. And what he means by that is he thinks Democrats are ginning it up as an issue beyond what voters feel. I think there's a lot of evidence that, you know, the truth is different. And that voters continue to feel frustrated by not only ongoing price increases, but a lack of disinflation and decrease in prices that Trump had sort of teased in particular on things like energy costs. And so we will see him sort of take the wins. Gasoline prices expect that to be discussed heavily throughout this evening's speech. But I think, you know, he has been trying to diffuse the issue that he, of course, rode pretty heavily in the 2024 campaign of voter outrage over price levels that continues to simmer.

14:42David Gura:Poll after poll shows it. And so I think that he is trying to sort of argue his way out of the box a little bit on it. But I think we've just seen so much evidence that voters, including Republican voters, continue to be pretty upset about this. And it, of course, is difficult for the government to do much about it. It's been a bit of deja vu for the White House press corps watching Trump go after the meatpacking conglomerates, for instance, because that is exactly what Joe Biden tried to do when he was in exactly the same position in his term and facing exactly the same voter pressure of people being upset about it.

15:17David Gura:So I expect Trump to, of course, sweep a lot of that under the Biden rugs. Say this is a Biden problem. We're fixing it. And just kind of go forward and pray, basically, that the CPI prints continue to be not that bad or even good, dare I say, and that this will fade from voters' minds come November. But the politics hanging over this are funny because Trump is really pushing to cling to a majority because he thinks he'll get impeached if he doesn't. But he's not really using the majority he has right now for much, in part because it's so small, in part because we're starting to see Republican blowback on things like tariffs.

15:53David Gura:And so he is in a pickle.

15:56Josh Wingrove:Josh, let me ask you a bit more about how he's approaching these midterms. So we've seen Democrats win some seats in some key special elections in Texas and Louisiana. I imagine those losses are leading to some nervousness among Republicans. What do we know about how President Trump plans to support Republican candidates in these midterms, the kinds of candidates he's setting out to support.

16:16David Gura:He said he's going to travel, but he hasn't really followed through on it so much. And of course, there are some races where the party would love for him to get involved. Texas jumps to mind on that, where there's a pretty duke it out primary going on for the Senate race there that could help determine whether that seat is more in play than it otherwise might be. And so, you know, he continues to sort of demand purity tests of Republican candidates. And if he doesn't, you know, get what he wants, such as votes on tariffs, he is very comfortable supporting a primary against a sitting lawmaker, even if it raises the chance that Democrats flip that seat.

16:56David Gura:And so what is he going to do? Well, he thinks that he's going to sort of put himself on the ballot. That is what we've heard Susie Wiles and others signal publicly that Trump getting involved will help make sure the Trump voters who tend to only go to the polls for Trump bother to in a midterm when he himself is not necessarily on the ballot. But Trump getting involved, of course, has a two-pronged effect, activating both his biggest supporters and those people that either don't like him or retiring of him. And so whether this all works, you know, we will see. But you can start to see some states lining up on the Senate side where things can get thorny in a hurry.

17:31David Gura:And you can start seeing how Democrats are feeling pretty confident when they, you know, just need a handful of seats to flip and they were to take the majority in the House.

17:39Josh Wingrove:Josh, we've talked about economic policy and foreign policy. You said one goal here for the president is not to be impeached if he loses the majorities in the House and Senate. Beyond that, what are the president's other priorities here at this point in his second term? I look at that Project 2025 document from the Heritage Foundation, what it's called for, and it seems like the president's done roughly half of what's in there. Do we have a good sense of what's next on his policy agenda?

18:03David Gura:I think the sense is fading because new battles are cropping up. I'm thinking here in particular of his recent criticism of Leonard Leo and the broad sort of Republican judicial establishment that has been so core to his confirmation of three Supreme Court justices. He made a comment in the last week or so that sort of acknowledged that he doesn't expect more of that, by the way, that neither Alito nor Thomas will retire in his term. You know, it's difficult to continue enacting the agenda if the feuds within your movement are starting to rise and Trump going to battle with like the hardcore conservative legal establishment.