Trump Defends Economy & Tariffs in State of the Union

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1:09Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with the main political event of the moment, President Donald Trump's State of the Union Address. Members of Congress and my fellow Americans, our nation is back, bigger, better, richer and stronger than ever before. Over a record one hour and 47 minutes, the president delivered a strident defense of his economic record in a speech that was heavy on patriotism. This July 4th, we will mark two and a half centuries of liberty and triumph, progress and freedom in the most incredible and exceptional nation ever to exist on the face of the earth.

2:00And you've seen nothing yet. President Trump touted falling food and gasoline prices and blamed Democrats for costs that have stayed elevated since before the pandemic. And after the Supreme Court struck down his signature tariffs last week, President Trump gave little indication he plans to steer away from import duties. They will continue to work along the same successful path that we had negotiated before the Supreme Court's unfortunate involvement. So despite the disappointing ruling, these powerful countries saving, it's saving our country the kind of money we're taking in. President Trump delivered his remarks before four of the Supreme Court's justices, three of whom voted to reject his emergency tariffs.

2:44Well, Nathan, President Trump did not offer many new policy proposals in his speech, though he did promise a$1 ,000 retirement saving match for workers without 401ks. He also called for a congressional ban on stock trading, and he took aim at Democrats for opposing his tough stand on immigration enforcement. These people are crazy. I'm telling you, they're crazy. The president accused Democrats of destroying the country after starting the speech with a recognition of Olympic gold medal winners. President Trump also touched on foreign policy with a warning about Iran's nuclear program. They continue starting it all over.

3:26We wiped it out and they want to start all over again. And at this moment, again, pursuing their sinister ambitions. We are in negotiations with them. They want to make a deal, but we haven't heard those secret words. we will never have a nuclear weapon. President Trump also praised the operation in Venezuela that captured former President Nicolas Maduro and awarded the Congressional Medal of Honor to one of the helicopter pilots involved in the raid. In one of the speech's more poignant moments, the president awarded the Purple Heart to the National Guard member who survived an attack in Washington last November.

4:03And reaction, of course, Karen, is pouring in to President Trump's speech. Rick Davis was national campaign manager of John McCain's 2008 presidential campaign and is now a Bloomberg politics contributor. I think it was a different kind of speech than what we're used to seeing from President Trump. Normally, he paints a pretty dark picture of the country in order to say how much he has changed and made it better. He actually started off with the positive report card. And at a time when most people are tuned in, the first 30 minutes of this speech, he's going to get the highest number of eyeballs on the TV.

4:37He talked about affordability, the economy. And like Rick Davis, Jeanne Sheehan-Zaino is also a Bloomberg politics contributor. I think he got the memo from Susie Wiles, affordability, affordability, the first hour was on affordability. But what he didn't do is say how he is going to fix and address how people feel. and I don't think he changed any mind. So I think it was better than I thought it might be, but it wasn't enough to give people confidence that anything is going to change in the next year or two. Bloomberg Politics contributors Jeanne Sheehan-Zaino and Rick Davis made their comments on a special edition of Bloomberg's Balance of Power with Joe Matthew and Kaylee Lines.

5:19Nathan, Virginia, Governor Abigail Spanberger delivered the Democratic rebuttal to President Trump's State of the Union address. Since this president took office last year, his reckless trade policies have forced American families to pay more than$1 ,700 each in tariff costs. Small businesses have suffered, farmers have suffered, some losing entire markets. Every day, Americans are paying the price. Virginia Governor Abigail Spanberger was flanked by American flags as she's delivered the speech from Colonia Williamsburg. Democratic Senator Alex Padilla of California delivered the party's Spanish language response.

5:58Now, Karen, we turn to the latest in the search for the mother of Savannah Guthrie. The Today Show host says the family's putting out a new reward for information leading to the recovery of Nancy Guthrie. We need her to come home. For that reason, we are offering a family reward of up to$1 million for any information that leads us to her recovery. Savannah Guthrie made that announcement on Instagram. Nancy Guthrie went missing from her Arizona home more than three weeks ago. Let's turn to the markets now, Nathan. Futures are higher ahead of yesterday's tech-fueled rally on Wall Street. The 1 % gain for the NASDAQ comes ahead of this afternoon's earnings report from AI behemoth NVIDIA.

6:45We get a preview with Bloomberg's Tom Busby. NVIDIA needs to deliver another blowout earnings report to justify the hundreds of billions of dollars being spent by tech giants on its artificial intelligence chips and other AI infrastructure. CEO Jensen Wong has assured investors that demand remains high as customers like Alphabet and Meta Platforms have detailed aggressive spending plans over the last few weeks. But investors are eager to hear about additional ways for NVIDIA to grow, including planned chip sales in China. Bloomberg consensus calls for revenue of$65.91 billion on adjusted earnings per share of$1.53.

7:21Tom Busby, Bloomberg Radio. All right, Tom, thank you. In Europe, shares of HSBC are trading near a record. Right now they're up four and a half percent. Europe's largest bank reported better than expected earnings and raised some targets. In an interview with Bloomberg, HSBC CEO Giorgio Hedery said the bank will continue to evolve. We are transforming with precision, with discipline, and we're doing it at pace, and we expect to be able to conclude a number of the actions we set out to do earlier than initially planned. HSBC's George O 'Hedrie says the strong results boosted the bonus pool by about 10 percent to $3.9 billion.

7:58That is the highest in at least a decade. Nathan, we have new developments this morning in the takeover battle for Warner Brothers. And we get the details with Bloomberg's John Tucker. John, good morning. Good morning, Karen. Yeah, this is the Hollywood drama that seems to have no ending. Warner Brothers Discovery says a new$31 a share buyout offer from Paramount Skydance could lead to a better deal than its existing agreement with Netflix. This may lead to yet another round of bidding for the iconic Hollywood studio. Now, Warner Brothers isn't withdrawing its recommendation that investors get behind Netflix's$27.75 a share agreement, But the latest Paramount terms might just need a closer look.

8:37Paramount's latest salvo shows the company, led by David Allison, isn't dropping its pursuit of Warner Brothers anytime soon. The Sweden offer is going to test Netflix's willingness to pay up for the Warner Brothers production studios and a library that includes DC Comics and Game of Thrones. I'm John Tucker, Bloomberg Radio. All right, John, thanks. Turning to the economy now, Chicago Fed President Austin Goolsbee says the Supreme Court's decision to strike down many of President Trump's tariffs may help cool inflation. In an interview with Bloomberg, Goolsbee also praised Fed Chair Jay Powell.

9:09I've said unapologetically, I think Jay Powell's a first ballot Hall of Fame Fed chair, and I'm a big supporter of his. I don't know what the rules are. When people's terms expire as chair, are they allowed to stay on? If they are, I'm a I'm a big Jay Powell supporter. And Chicago Fed President Austin Goolsbee also praised President Trump's pick to succeed Powell as chair, former Fed Governor Kevin Warsh. You can catch the full interview at the new Bloomberg Video Hub. Find it at Bloomberg.com slash videos. And we have a programming note, Nathan. The markets may pause for the weekend, but the world does not.

9:51That's why we're bringing you a new radio and TV show. Bloomberg this weekend is looking beyond the daily headlines to the bigger themes driving politics, business, and culture. Join David Gura, Christina Ruffini, and Lisa Mateo for smart conversations and in-depth interviews that help make sense of the week that's been and what comes next, Saturdays and Sundays from 7 a.m. Eastern on Bloomberg Radio, TV, and the Bloomberg Business App. Time now for a look at some of the other stories making news in New York and around the world, and for that, we're joined by Bloomberg's Michael Barr. Michael, good morning.

10:27Good morning, Karen. During President Trump's State of the Union speech, he referenced New York City Mayor Zoran Mamdani. The president says New Yorkers are required to provide identification, showing U.S. citizenship to register to vote, but do not have to show ID to cast a ballot. And even the new communist mayor of New York City, I think he's a nice guy, actually. I speak to him a lot. Bad policy, but nice guy. Just said they want people to shovel snow. They got hit hard. Want some to shovel snow. But if you apply for that job, you need to show two original forms of ID and a Social Security card.

11:09Yet they don't want identification for the greatest privilege of them all voting in America. No, it's no good. President Trump has proposed to enact a national voter ID law. American tourists are still stuck in Puerto Vallarta days after the Mexican army killed a cartel boss Sunday, sparking clashes. This man was visiting from Chicago with his husband and friends when he says a gunman approached their rental car. He got to the car, pointed at my head and through the window said, get out of the car. He threw a bomb or an incendiary device in it and the car exploded. He hunkered down for days after the State Department urged U.S.

11:51tourists across Mexico to shelter in place. The calls for resignation are getting louder for Republican Congressman Tony Gonzalez following the release of explicit text messages with a congressional aide who died by suicide last year. Gonzalez says, though, he won't step down. I work every day for the people of Texas. Thank you, Karen. And there will be an opportunity for all the details and facts to come out. What you've seen is not all the facts. Speaker Mike Johnson said the matter is under investigation. However, the speaker stopped short of calling for Gonzalez to step down, despite a growing number of House Republicans who have called for his resignation.

12:33French President Emmanuel Macron has accepted the resignation of the Louvre Museum's president, Lerence Dakar had been under fire in the wake of a stunning and embarrassing heist of the French crown jewels. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg Karen. Thanks Michael. Time now for our Bloomberg sports update and for that we bring in John Stashauer. Thanks Karen. The top four teams in college basketball all played and won. That includes number one Duke a 44 point victory at Notre Dame. Second-ranked Arizona won at Baylor.

13:09Third-ranked Michigan beat Minnesota. All three of those teams have a record of 26-2. Also winning was fourth-ranked Iowa State and Miami of Ohio, who's now 28-0. The Atlanta Falcons say they will release quarterback Kirk Cousins when free agency begins next month. He played the last seven games for the Falcons and they went 5-2. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real, lots of firms throw a couple flashy funds your way and call it a day.

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14:29And I'm Caroline Hepker in London. We're the hosts of the Bluebird Daybreak Europe podcast. We're up early every weekday keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters 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.

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15:27Coast to Coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. After more than a year back in office and with polls showing more anxiety over the economy, President Donald Trump used his first State of the Union address of his second term to declare our nation is back. I can say with dignity and pride that we have achieved a transformation like no one has ever seen before and a turnaround for the ages. President Trump in the record setting one hour and 47 minutes State of the Union.

16:05This morning we're joined by Jennifer Lawless, professor of politics at the University of Virginia. Appreciate you coming on so early this morning after that long speech. I wonder if you watched the whole thing and what your reaction to it was. Good morning, Professor. Good morning. Thanks for having me. It was a long speech and it was basically exactly what Republicans and Democrats were expecting. Donald Trump touted his successes and those successes are perceived by Republicans as the energy that they need heading into the midterms. And those same successes are perceived as failures by the Democrats who believe that the Trump agenda is just completely wrong and leading the country in the wrong direction.

16:45So I don't think that anybody who watched the speech left surprised. So this was a chance for the president to offer something of a reset with the polls showing, as I mentioned, some of those anxieties around the economy, immigration enforcement, even foreign policy as well. Did he offer that reset? I don't think so. He has a problem that Joe Biden had a few years ago, which is that you can you can name a bunch of metrics that suggest that the economy is moving in the right direction. But if people don't feel it, it doesn't matter. And you have to be really careful about how you thread that needle because you don't want to tell people that they feel something or they're experiencing something that's wrong.

17:27And he was unable to do that. It's one thing to itemize a bunch of statistics. It's another to actually make people feel like the economy is improving. And I don't think he was successful on that front, though. He did offer a few policy proposals. He made it pretty clear that he's going to stick with tariffs and mentioned things like retirement matches for people who don't have 401ks, congressional stock ban, that sort of thing. Are those the kind of things that resonate with voters? The polls suggest that what matters right now to voters is affordability. The 2025 election in the fall made that very clear.

18:04The Democrats outperformed expectations largely with candidates who were pushing that affordability message. And the Trump administration just hasn't been able to do that in a compelling way. So they can talk about other issues. They can talk about 401ks. People are more concerned right now about whether they have money in their pockets to buy groceries. So again, these are not necessarily policies that would be viewed as very unpopular, but But they're not what people are looking for when they wake up in the morning and they're trying to figure out how to put food on the table. Well, it kind of gets us to the Democratic rebuttal as well for people who stayed up long enough to see Virginia Governor Abigail Spanberger.

18:41It was pretty late. Does that hinder the message for Democrats just from the timing? And if you did see the message, what did you make of that? I did watch Abigail Spanberger's speech. It was very similar to the campaign speeches that she was giving over the course of her gubernatorial campaign. That resonated in Virginia. It resonated with Democrats and independents and even a handful of Republican voters. The problem is it was well after 11 o 'clock. People were tuned out. Most people don't watch the State of the Union address in the first place. And frankly, the people who are tuning in already have solid views of both Donald Trump and the Democrats.

19:19And so I think she was quite effective. It's a terrible speech to have to give. The rebuttal is well known as a very difficult endeavor. But I'm not sure that that matters much either. We're speaking with Jennifer Lawless, professor of politics at the University of Virginia. So given that we didn't see very many policy proposals and we did see a lot of attacks at times from President Trump against the Democrats, how does this potentially set the tone heading into the midterms? Well, I do want to note one policy change that we saw, and that was the rhetoric around immigration. It does seem that the president and the Republicans learned something from what happened in Minneapolis.

20:02And so he was focused more on border security and he was focused more on immigrants who he's deemed criminals than just sort of deportations in general. And so I think that does suggest that heading into the midterms, the Republicans might be a little bit more careful about how they talk about immigration because their harsh rhetoric and actions have backfired. But other than that, my expectation is that 2026 is going to look a lot like 2024. And it's really going to come down to which side could turn out their voters because the Republicans are basically sticking with the script. But sticking with the script as well, when it comes to foreign policy, we heard the president touch on the tensions with Iran as well.

20:49Did you see the president tip his hand at all in terms of where things could go after the negotiations that are set to resume in Geneva tomorrow? I think he was pretty careful. I don't think that he wanted to pollute those negotiations. I'm not sure that he knows exactly what it is that he's going to do. And given that the world was watching and that world leaders are watching, I don't think he wanted to say much ahead of time. I was actually surprised at how little attention foreign policy received at the speech, given what a big central part of his agenda it is. Just the fact that we did see so much of a focus on domestic policy as well.

21:27What does that tell us about what the focus could be from the president and the White House over the next few months? I mean, we've heard from the White House chief of staff, Susie Wiles, a while back saying that the president was going to be out on the road almost weekly touting the economy. Do you see that continuing? If that's going to continue, the president needs to work on the messaging because, again, there was a disconnect between the kinds of statistics and successes that he was touting and the average American's perceptions of whether anything is affordable. It may be that he was trying out some lines.

22:01it may be that he's beginning to think about what his campaign trail speeches will sound like when he's campaigning for other Republicans. But at this point, I don't think that the words that he used last night and the policies that he talked about last night are going to lead to major successes for Republican candidates because people in America are just not feeling economic gains right now. Just about a minute left here, Professor. What moments from the speech or moments do you think are going to stand out, if any? And we usually see a post-State of the Union bounce in the polls for the president.

22:36Do you think we'll see that again this time around? The bounce in the polls is tricky because the people who are tuned in tend to be the co-partisans of the president. That's true for both Democrats and Republicans, depending who's in office. So the bump is usually short-lived and a little bit artificial. And the moments that the media tend to cover are the moments that are unusual or rare or provocative. I think we're going to keep seeing over and over again the stand up if you agree with this statement attack that he took, which basically was an attempt to get the Democrats either to agree with him about what the United States is about and what our goals as Americans should be or to differentiate them from Republicans.

23:23And, you know, it was a pretty bold move on his part. The Democrats did not stand up. They did not take the bait. And my bet is that we'll see that over and over and over again for the next 48 hours. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121.

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