In State of the Union, Trump Touts Trade Deals, Economic Wins

President Donald Trump delivers his State of the Union address to a joint session of Congress on Capitol Hill in Washington, Tuesday, Feb. 4, 2020.

President Donald Trump delivers his State of the Union address to a joint session of Congress on Capitol Hill in Washington, Tuesday, Feb. 4, 2020. AP Photo/Patrick Semansky


Connecting state and local government leaders

On the eve of an impeachment vote, President Trump underscored a recent agreement that he said will restore the United States’ “manufacturing might.”

WASHINGTON – President Trump touted the strength of the American economy during his State of the Union address on Tuesday, highlighting recently inked trade deals as well as wage and job gains among the working class.

Trump said the American middle class was benefiting from a “blue-collar boom,” with 7 million new jobs added during his administration and an unemployment rate of 3.5%, the lowest in half a century.

“The years of economic decay are over,” Trump said.

To ensure the next generation is also able to benefit from those economic gains, the president said students across the country must have access to quality education. He called on Congress to support school choice programs and require vocational training programs at all high schools. While the speech largely focused on the economy, Trump also emphasized his immigration policies, while taking aim at sanctuary laws adopted by Democratic states and cities to not cooperate with federal immigration law enforcement.

The president’s annual address came amid the backdrop of political turmoil, with the Senate set for a final impeachment vote on Wednesday. Addressing members of the U.S. Senate and House of Representatives, which in December passed two articles of impeachment against the president, Trump sidestepped the topic.

Instead, he touted a recently inked trade deal  that he said will restore the country’s “manufacturing might.”

In January, the president signed both a trade agreement with China and the United States-Mexico-Canada Agreement, which will replace the 25-year-old North American Free Trade Agreement. The USMCA, signed after significant negotiations with Democrats, includes incentives to make cars in North America, provide American dairy farmers more access to Canadian markets, strengthens provisions to help identify and prevent labor violations.

“The USMCA will create nearly 100,000 high paying American auto jobs and massively boost exports for our farmers, ranchers and factory workers,” Trump said.

Under the trade deal with China, Beijing will purchase more American goods and the United States will lift some tariffs imposed on Chinese goods.

Some economists have expressed skepticism that the  deal can compensate for the 3.7 million U.S. jobs lost over the past 20 years due to trade deficits with China.

Trump also held up the federal Opportunity Zones program, a tax break meant to revitalize poor communities, as an example of a policy driving economic benefits.

“Wealthy people and companies are pouring money into poor neighbors or areas that haven’t seen investment in many decades, creating jobs, energy and excitement,” Trump said of the program.

Two of the president’s guests at the address were beneficiaries of the program, which was established in 2017 under a sweeping federal tax overhaul. The program provides generous capital gains tax breaks to investors who put money into special “opportunity funds” that are supposed to invest in low income census tracts. 

The Treasury Department’s inspector general recently opened an investigation into the program after reports indicated that wealthy investors were pouring money into high-end projects. Critics have also noted that the lack of reporting requirements will make it difficult to judge whether investments are being made and are successful. 

As further evidence of economic gains, Trump highlighted the country’s low levels of unemployment, which remained at 3.5% in December, and increasing wage gains.

“After decades of flat and falling incomes, wages are rising fast and wonderfully, they are rising fastest for low income workers who have seen a 16% pay increase since my election,” Trump said.

But the wage gains made among workers in the bottom 20% of earners over the last two decades were largely due to minimum wage increases enacted at the state level, according to the Economic Policy Institute, a left-leaning think tank.

“These are policies that were implemented by state legislatures and local governments around the country to help offset the effects of a decline in the real value of the federal minimum wage,” the EPI wrote in a statement issued before the SOTU.  

While Republicans repeatedly applauded throughout the night, Democrats were less receptive to Trump's speech, with House Speaker Nancy Pelosi ripping up a printed copy of the address after the president finished. Afterward, she told reporters “it was the courteous thing to do considering the alternatives.”

Rep. Tim Ryan, an Ohio Democrat, walked out of the speech. If the American economy is thriving, “why are so many Ohioans working 2 or 3 jobs and struggling to make ends meet?” he later wrote on Twitter. 

“He didn’t talk about inequality and he didn’t talk about the struggles of the middle class,” said Rep. Jaime Rasken, a Maryland Democrat. 

Leaders in local government had hoped to hear more about how the president intends to address the nation’s crumbling infrastructure.

The key priorities for local governments include building sustainable infrastructure, creating skilled workforce, addressing homelessness, and reducing gun violence, said Joe Buscaino, president of the National League of Cities.

“These issues are the most important issues for America’s cities, towns and villages,” said Buscaino, a Los Angeles city council member, ahead of Tuesday’s address.

The National Association of Counties similarly framed major infrastructure upgrades as a priority.  

“We will work with our federal partners to preserve local decision-making, streamline federal regulations and secure direct federal investments in infrastructure that strengthens our counties and our nation,” said executive director Matthew Chase.

The president has showcased infrastructure investment as a key priority in past SOTU speeches, but Republicans and Democrats in Congress have yet to agree on a way to pay for a major infrastructure package. 

During Tuesday’s speech, Trump broached the topic only once, calling on Congress to pass the America’s Transportation Infrastructure Act of 2019, a five-year reauthorization bill authored by Sen.  John Barrasso, a Wyoming Republican. 

In comparison, Michigan Gov. Gretchen Whitmer, who gave the Democratic response, highlighted efforts by Democratic governors in New Jersey and Illinois to invest in infrastructure from highways to water systems.

“All across the country, Democratic leaders are rebuilding bridges, fixing roads, expanding broadband and cleaning up drinking water,” Whitmer said, adding that Trump and Republicans are standing in the way of plans introduced by congressional Democrats to invest in infrastructure.

Andrea Noble is a staff correspondent with Route Fifty.

NEXT STORY: Are State and Local Governments Prepared for the Next Recession?