Trump’s State of the Union and the Politics of Denial

The most striking feature of US President Donald Trump’s State of the Union address was the gap between its content and reality. Not only the hard reality of official statistics, but also the everyday reality experienced by American households — as reflected in opinion polls and in the results of the local elections held over the past four months. 

The main pillars of the President’s optimistic narrative about America had already been previewed in an article he wrote himself in the Wall Street Journal a few days earlier, defending tariffs that, he argued, “have created an American miracle” and allow us to “build the greatest economy in the history of the world”. 

Consider a few of those claims. 

First, the President argued that the US stock market has never performed so well. The data show that in his first year in office Wall Street rose by 16 per cent — a respectable result, but weaker than under recent predecessors such as Joe Biden (+19 per cent) and Barack Obama (+35 per cent). Over the same period, US equities also underperformed European markets (+24 per cent), especially once the dollar’s 12 per cent depreciation is taken into account. 

Second, he claimed that in 2025 the US economy returned to strong growth after years of stagflation allegedly produced by “sleepy Joe” Biden. Yet newly published GDP figures indicate that growth in 2025 was 2.2 per cent, below the 2.7 per cent average recorded in 2022–24 during the Biden presidency. 

Third, he suggested inflation has disappeared. The latest figures for January 2026 show consumer prices rising 2.4 per cent year on year. Excluding the most volatile components, such as food and commodities, inflation has moved back up to 3 per cent. 

Fourth, the President said the US trade deficit has fallen by 77 per cent. In fact, the 2025 deficit was broadly unchanged from the previous year and has increased in recent months. Imports rose by 5 per cent — faster than GDP. 

Fifth, he argued that factory construction and job creation surged last year. But employment growth was materially weaker than the year before, under Biden — and manufacturing employment actually contracted. 

A final claim — and it is worth pausing here — is that “the burden of tariffs has fallen overwhelmingly on foreign producers and intermediaries, including large companies”, citing a study published in Harvard Business Review. The problem is that the study’s conclusion is the opposite: roughly 80 per cent of the tariff burden is paid by Americans. 

Trump rejects the argument, also advanced by the Journal, that tariffs are simply taxes. That view was reinforced a few days later by the Supreme Court, which denied the President the authority to impose them without congressional consent. 

The President appears to believe he can persuade Americans that reality differs from what they experience each day. Or he may be betting that he can improve conditions in the coming months — before the midterm elections — through measures more effective than those adopted so far. 

Yet that second hypothesis sits uneasily with the White House response to the Supreme Court ruling. Rather than seizing the opportunity to reduce or remove tariffs — as the administration had begun to do after last November’s election results, notably by exempting some food items — the President chose to reaffirm most of them, adding uncertainty about their effectiveness and durability. 

In short, faced with an institutional clash, the reaction has not been to change course but to double down — in the conviction that the path taken so far is the right one. 

The final line of the President’s Journal article, written in capital letters — “TRUMP WAS RIGHT ABOUT EVERYTHING!” — captures the approach. It is a useful guide to how economic policy is likely to be conducted over the next few months. The Court’s decision may have set procedural constraints. Beyond that, the message is simple: more of the same. 

The unpredictability of the first year is therefore set to continue, at least until November — and with it, uncertainty. 

Conclusion: fasten your seatbelts. 

A previous version of this article was published by Il Foglio