Economy
At State of Union, Trump tries to win over voters sour on economy
U.S. President Donald Trump proclaimed during a marathon State of the Union on Tuesday that “we’re winning so much,” arguing that his policies have fueled an economic boom at home and imposed a new world order abroad in hopes it can counter his sliding approval ratings.
Trump’s main objective was convincing increasingly wary Americans that the economy is stronger than many believe, and that they should vote for more of the same by backing Republicans during November’s midterm elections.
In all, Trump spoke for a record 108 minutes, breaking – by eight minutes – the previous time mark from his address before a joint session of Congress last year.
Heeding calls from Republican lawmakers worried they could lose their congressional majority later this year, Trump spent the first hour of his televised speech focused on the economy, saying he had slowed inflation, driven the stock market to record heights, signed sweeping tax cuts and lowered drug prices.
But it was unclear whether his rosy assessment would assuage Americans’ anger about the cost of living. Trump sought to blame his Democratic predecessor, Joe Biden, for high prices, but opinion polls show voters hold Trump responsible for not doing more to ease an affordability crisis after he campaigned relentlessly on the issue.
“Our nation is back – bigger, better, richer and stronger than ever before,” Trump said after taking the stage to cheers of “USA, USA” from fellow Republicans in Congress, with dozens of empty seats on the Democratic side a reminder that many lawmakers skipped the speech for anti-Trump rallies outside.
Fraught moment
The annual speech to Congress came at a fraught moment for Trump’s presidency, with polls showing a majority of Americans have soured on his performance, anxieties rising over Iran and his signature tariff policy foundering after the U.S. Supreme Court struck down most of his import taxes.
For much of the speech, Trump was uncharacteristically disciplined, mostly appearing to stick to his prepared remarks and eschewing his usual stream-of-consciousness digressions. But he flashed his combative side while discussing his immigration crackdown, exchanging shouted insults with several Democratic lawmakers.
“Our country is winning again. In fact, we’re winning so much that we really don’t know what to do about it. People are asking me, ‘Please, please, please, Mister President, we’re winning too much. We can’t take it anymore,'” Trump said.
The president championed his immigration crackdowns and his push to preserve widespread tariffs that the Supreme Court just struck down. He drew applause only from Democrats while describing the high court’s decision, which he called “an unfortunate ruling.”
Trump vowed to plow ahead, using “alternative” laws to impose the taxes on imports and telling lawmakers, “Congressional action will not be necessary.” Trump argued that the tariffs are paid by foreign countries, despite evidence that the costs are borne by American consumers and businesses. “It’s saving our country,” he said.
The only Supreme Court justices attending were Chief Justice John Roberts, as well as Justices Brett Kavanaugh, Amy Coney Barrett and Elena Kagan. Trump greeted them personally before the speech, despite last week slamming Coney Barrett – who he appointed to the high court in his first term – for siding with the majority against his tariffs.
Democrats also stood for Trump vowing to halt insider trading by members of Congress. But Rep. Mark Takano, a California Democrat, yelled, “How about you first!” Rep. Rashida Tlaib, a Michigan Democrat, called out, “You’re the most corrupt president!”
When some heckling continued, Trump proclaimed, “You should be ashamed of yourselves.” Later, he pointed at Democrats and proclaimed, “These people are crazy.”
Cost of living
Trump didn’t dwell on efforts to lower the cost of living – despite polling showing that his handling of the economy and kitchen-table issues has increasingly become a liability. Such concerns about the high costs of living helped propel Democratic wins around the country on Election Day last November.
There also are persistent fears that tariffs stoking higher prices could eventually hurt the economy and job creation.
While Trump said inflation is “plummeting,” prices for groceries, housing, insurance and utilities remain significantly higher than they were a few years ago. New data released on Friday showed the economy slowed more than expected last quarter while inflation accelerated.
It is potentially politically perilous ahead of November elections that could deliver congressional wins to Democrats, just as 2018’s blue wave created a strong check to his administration during his first term.
A Reuters/Ipsos poll found only 36% of Americans approve of Trump’s handling of the economy. Democrats hope to seize control of both houses of Congress from Republicans in November when all 435 seats are on the ballot for the House of Representatives and about a third of the 100 seats in the Senate.
On Tuesday, Trump blamed his predecessor, former President Joe Biden, along with Democratic lawmakers in the chamber, saying they were responsible for rising prices and health care costs, two issues his political opponents have repeatedly raised against him.
“You caused that problem,” Trump said of affordability concerns. He added a moment later, “They knew their statements were a dirty, rotten lie.”
Trump also said he’d press tech companies involved in artificial intelligence to pay higher electricity rates in areas where their data centers are located. Such data centers tend to use large volumes of electricity, potentially increasing the cost of power to other consumers in the area.
Another notable off-script moment came as Trump was referencing prescription drug prices, saying, “So in my first year of the second term – should be my third term – but strange things happen,” prompting at least one chant in the chamber of “Four more years!”
Virginia Gov. Abigail Spanberger, a Democrat whose decisive victory in November was an early midterm warning sign for Republicans, delivered her party’s official response, criticizing Trump for abandoning struggling Americans.
“Is the president working to make life more affordable for you and your family?” she said. “We all know the answer is no.”
Spanberger slammed the president’s aggressive immigration policies, his widespread cuts to the federal government and his tariffs.
“Even though the Supreme Court struck these tariffs down four days ago, the damage to us, the American people, has already been done. Meanwhile, the president is planning for new tariffs,” she said. “Another massive tax hike on you and your family.”
Türkiye is keen to deepen cooperation with South Korea in nuclear power, artificial intelligence, semiconductors, battery technologies and renewable energy, Energy and Natural Resources Minister Alparslan Bayraktar said on Wednesday.
Bayraktar was speaking in Seoul on the sidelines of the Türkiye-South Korea Joint Economic Commission meeting, which he co-chaired with South Korea’s Deputy Prime Minister and Finance Minister Koo Yun-cheol.
Opening the meeting, Bayraktar said the relationship between the two countries rests not only on trade and diplomacy but also on shared history and strong people-to-people ties.
He said bilateral trade reached $11 billion in 2025 and that South Korea’s investment stock in Türkiye stands at about $1.9 billion.
Bayraktar said South Korean President Lee Jae-myung’s recent visit to Türkiye and his talks with President Recep Tayyip Erdogan had given fresh momentum to relations.
“Supporting this political will with concrete projects in the economic field should be our common goal,” he said.
The minister described Türkiye as a competitive production and export hub for South Korean companies, pointing to its young and skilled workforce, large domestic market and access to the European Union through the customs union, as well as to the Middle East, North Africa and Central Asia.
He said Ankara wants to expand cooperation in energy, transportation, infrastructure, defense, science and technology.
“We prioritize the development of joint projects in strategic areas such as nuclear energy, artificial intelligence, semiconductors, battery technologies, critical minerals, innovation and renewable energy,” he said.
The two sides signed the protocol of the Joint Economic Commission meeting after the talks.
Talks on new reactors
During his visit, Bayraktar also met executives from major South Korean energy and mining companies and industrial groups at a roundtable where he outlined Türkiye’s long-term energy plans.
He reiterated Türkiye’s goal of reaching 20 gigawatts of nuclear power capacity by 2050 and noted that four reactors are currently under construction.
“We are a growing market and our demand is constantly increasing,” he said. “The current construction is being carried out by a Russian company, but within the scope of our nuclear vision, we are in very close and intensive talks with KEPCO for new reactors.”
During the visit, Bayraktar also met Kim Dong-cheol, chief executive of the Korea Electric Power Corporation.
He added that Türkiye is closely monitoring developments in small modular reactors, or SMRs, and signaled further discussions on their potential role in the country’s energy transition.
Bayraktar also encouraged cooperation beyond the two countries’ borders. “With Turkish companies, Türkiye and Korea can collaborate in the Middle East, Africa, and Central Asia,” he said. “This way, we can combine our strengths to act jointly in different countries and regions.”
On the sidelines of the meeting, Bayraktar held talks with South Korea’s Minister of Climate, Energy and Environment Kim Sung-hwan.
In a post on Turkish social media platform NSosyal, he said that they reviewed existing partnerships and explored new opportunities in renewable energy, nuclear power and electricity transmission infrastructure.
“We agreed on a working agenda that will reflect the experience of both countries, primarily focusing on supply diversity to strengthen energy supply security and potential collaborations in third countries,” he said.
Bayraktar also met South Korea’s Trade, Industry and Energy Minister Kim Jung-kwan to discuss cooperation in nuclear energy and critical minerals.
He said Türkiye sees nuclear power as a key pillar of its energy supply security in line with its 2053 net-zero emissions target.
“We evaluated areas of joint work that will strengthen technical cooperation in nuclear technologies, engineering capacity and local industry contributions,” he said.
“We also discussed concrete cooperation options that will enhance the complementary capacities of the two countries in the field of critical minerals,” he said.
Türkiye and Syria aim to further improve bilateral trade, planning to have a joint mechanism meeting and an investment forum in the upcoming period, Trade Minister Ömer Bolat said Wednesday.
The minister spoke with Kuteybe Ahmed Bedevi, the head of the Syrian General Administration of Border Crossings and Customs, and Nidal al-Shaar, the Syrian minister of economy and industry, Bolat said on the Turkish social media platform NSosyal.
Bolat and Bedevi comprehensively evaluated cooperation in the field of customs, including the improvement and acceleration of processes in mutual trade, he said.
The discussions also focused on the modernization and expansion of customs gates and the acceleration of transit passages between the two nations, according to Bolat.
“We agreed to hold the first meeting of the Türkiye-Syria Joint Customs Committee, signed in December, as soon as possible,” he wrote.
Moreover, he suggested that the strengthening of logistics networks will contribute to regional connectivity by drawing strength from the energy created by the new administration in Syria.
Bolat and al-Shaar, at the same time, evaluated steps to further strengthen investment relations and the total trade volume, which reached $3.7 billion last year.
“We have agreed to hold the JETCO (Joint Economic and Trade Committee) mechanism meeting, established between the Turkish and Syrian Ministries of Trade, in the spring. We also decided to hold a comprehensive business and investment forum on the sidelines of the meeting,” he also said.
“We will continue our efforts to increase our trade with Syria and strengthen our bilateral partnerships,” Bolat highlighted.
Investment firm General Atlantic is reportedly selling an equity stake in TikTok parent company ByteDance in a deal that values the Chinese social media giant at a massive $550 billion, two people with knowledge of the matter said, marking a dramatic rise in the privately held shares.
The potential stake divestment will be the first since the Trump administration cleared the sale of the U.S. interests of ByteDance’s TikTok unit in January, and marks a 66% jump in value since a share buyback last year priced the company at more than $330 billion.
It also represents a 15% jump from a secondary market deal, which refers to the sale of shares in unlisted companies by existing shareholders to another investor, in November last year, that valued ByteDance at $480 billion, according to sources last month.
General Atlantic, which first invested in ByteDance in 2017 when the company was valued at about $20 billion, started the process to sell some of its shares in recent weeks and hopes to close the sale in March, said one of the sources.
Details of the financial terms of the stake sale, General Atlantic’s shareholding in ByteDance, and how much the New York-based investment firm will own in the social media company after the transaction were not immediately known.
The planned transaction underscores a sharp and sustained rise in the private market valuation of ByteDance, and bolsters the prospects for its other investors who are expected to enjoy a windfall when the company eventually makes its public market debut.
The sources declined to be named as they were not authorised to speak to the media. ByteDance did not respond to a Reuters request for comment, while General Atlantic declined to comment on the proposed share sale.
Opaque market value
Valuations of an unlisted company can vary widely in secondary market transactions, but any such new trade is seen as a test of investor appetite for the company’s shares.
ByteDance’s market value is opaque since the shares are privately held, and deal terms for the secondary market trades are not publicly disclosed.
Internally, General Atlantic has valued its ByteDance holding at $550 billion, and it is sensible for them to expect no less in their planned secondary trade, said the second source with knowledge of the matter. The proposed sale follows ByteDance’s deal to make TikTok’s U.S. operations majority U.S.-owned and resolve uncertainties that have plagued both companies since U.S. President Donald Trump threatened to ban the app over national security concerns.
General Atlantic’s share sale comes as some of its funds approach the end of their lifecycle, said the first source. Private equity firms typically have about 10-12 years to raise capital, invest in a fund, and return it back to investors.
General Atlantic’s CEO Bill Ford currently sits on ByteDance’s board.
ByteDance, whose revenues have surpassed Facebook owner Meta, has emerged as the world’s largest social media company by sales, Reuters reported last year.
The Chinese company’s annual profit for 2025 could reach about $48 billion. Venture capital firm HSG, formerly Sequoia Capital China, is separately raising a continuation fund that will take over some of its ByteDance shares held by funds that are reaching maturity at a valuation of between $350 billion and $370 billion, Reuters reported last month.
ByteDance’s other investors include KKR & Co, Susquehanna International Group (SIG), and China’s Primavera Capital Group.
The company’s core products include news aggregator Toutiao and short video app Douyin, TikTok’s equivalent in China. In 2025, it also emerged as China’s leading player in consumer AI apps thanks to its chatbot Doubao.
China and Germany want to enhance cooperation, German Chancellor Friedrich Merz and Chinese Premier Li Qiang said in Beijing on Wednesday, as Merz kicked off a visit aimed at resetting ties amid a widening trade imbalance and global uncertainties.
Merz told Li that Germany attached great importance to maintaining and deepening its intensive economic exchanges with China, its largest trading partner last year, while emphasizing the need to ensure fair cooperation and open communication.
“We have very specific concerns regarding our cooperation, which we want to improve and make fair,” said Merz, who faces a tough balancing act of redefining an economic relationship that is increasingly unfavorable to German interests.
Li called on both sides to work together to safeguard multilateralism and free trade, in reference to U.S. President Donald Trump’s trade war, which has upended the global trading system.
“China and Germany, as two of the world’s largest economies and major countries with important influence, should strengthen our confidence in cooperation, jointly safeguard multilateralism and free trade, and strive to build a more just and fair global governance system,” Li said.
China is seeking to pitch itself as a reliable economic partner, in contrast to the United States, as Europe struggles to address vulnerabilities in its supply chains and worries about growing dependence on China.
Europe is witnessing an acceleration of concerning trends in China, Europe’s Trade Commissioner Maros Sefcovic told the European Parliament on Tuesday, citing China’s growing dominance in key manufacturing sectors, a rising imbalance in bilateral trade, and falling market share of EU companies in China.
Restoring ties with China
Merz, on his first visit to China, becomes the latest European leader seeking to reset ties with China after Britain’s Starmer and Canada’s Carney earlier this year. At the same time, Beijing touts the benefits of engaging with its massive consumer market and advanced manufacturing base.
Engagement between Europe’s largest economy and China could set the stage for EU-China relations this year.
Merz comes accompanied by a delegation of 30 firms, including top carmakers such as Volkswagen and BMW, which are acutely feeling the strain of Chinese competition – contributing to a growing trade imbalance that has sparked concern in Berlin and led to calls for protectionist policies.
Germany’s heavily manufacturing-based economy has been particularly hard hit by competition from China’s manufacturers, Rhodium Group’s China analyst Noah Barkin said in a recent research note.
The face of China’s market, once coveted by foreign businesses for its wide consumer base and rising spending power, has changed in the last several years, with a slowing economy capping consumer demand and manufacturing overcapacity increasingly pushing domestic firms to look for opportunities abroad.
In editorials ahead of the visit, Chinese state media emphasized the potential for EU-China cooperation to become a stabilizing force while U.S. tariff policies upend global trade.
Xinhua News Agency, in an editorial published early on Wednesday, cited a German chamber of commerce survey finding that innovation gains in China are feeding back into German headquarters.
State-backed newspaper the Global Times said concerns about competition with China would be outweighed by the lure of China’s massive market.
“Rhetoric such as ‘systemic rival’ and ‘de-risking’ has at times complicated Germany’s China policy,” it said in an early Wednesday editorial.
“Yet the enthusiasm and actions of the German business community speak louder than political slogans.”
President Donald Trump’s promised temporary 15% tariffs to replace those struck down by the U.S. Supreme Court are meant to resolve a problem that many economists say does not exist: a U.S. balance of payments crisis, making them potentially vulnerable to new legal challenges.
Hours after the high court on Friday struck down a huge swath of tariffs Trump had imposed under the International Emergency Economic Powers Act (IEEPA), the president announced the new duties under Section 122 of the Trade Act of 1974 – a never-used statute that even his own legal team dismissed as irrelevant months ago.
An initial 10% tariff came into effect at a minute past midnight on Tuesday, according to a customs notice, and it was unclear when the promised increase to 15% would take effect. So far, Trump has only signed an executive order for the 10% tariff.
The Section 122 law allows the president to impose duties of up to 15% for up to 150 days on any and all countries to address “large and serious” balance-of-payments deficits and “fundamental international payments problems.”
Trump’s tariff order argued that a serious balance of payments deficit existed in the form of a $1.2 trillion annual U.S. goods trade deficit and a current account deficit of 4% of gross domestic product (GDP) and a reversal of the U.S. primary income surplus.
Is there balance of payments crisis?
Some economists, including former International Monetary Fund (IMF) First Deputy Managing Director Gita Gopinath, disagreed with the Trump administration’s alarm.
“We can all agree that the U.S. is not facing a balance of payments crisis, which is when countries experience an exorbitant increase in international borrowing costs and lose access to financial markets,” Gopinath told Reuters.
Gopinath rejected the White House’s claim that a negative balance on the U.S. primary income for the first time since 1960 was evidence of a large and serious balance of payment problem.
She attributed the negative balance to a large increase in foreign purchases of U.S. equities and risky assets over the past decade, which outperformed foreign equities over this period.
Mark Sobel, a former U.S. Treasury and IMF official, said that balance of payments crises are more associated with countries that have fixed exchange rates, and noted that the floating-rate dollar has been steady, the 10-year Treasury yield fairly stable, with U.S. stocks performing well.
Josh Lipsky, chair of international economics at the Atlantic Council think tank, agreed, noting that a balance of payments crisis occurred when a country could not pay for what it was importing or was unable to service foreign debt. That was fundamentally different from a trade deficit, he added.
Brad Setser, a currency and trade expert at the Council on Foreign Relations who served as a senior adviser to the U.S. Trade Representative in the Biden administration, took a somewhat contrarian view, arguing in lengthy X posts on Sunday that the Trump administration may have a reasonable case that there is a “large and serious” balance of payments deficit.
He noted that the current account deficit was far higher than when then-president Richard Nixon erected tariffs in 1971 to address a balance of payments crisis, and the U.S. net international investment position is much worse. This “gives the administration a real argument,” in favor of its tariffs, Setser wrote.
Wrong statute for job
Despite the Trump administration’s new focus on balance of payments, the Justice Department had previously argued that Section 122 was the wrong statute to handle a national emergency over the trade deficit.
In court filings in its defense of IEEPA tariffs, the Justice Department said Section 122 would not have “any obvious application here, where the concerns the president identified in declaring an emergency arise from trade deficits, which are conceptually distinct from balance-of-payments deficits.”
Neal Katyal, who argued at the Supreme Court on behalf of plaintiffs challenging the IEEPA tariffs, told CNBC that the Trump administration’s stance against the use of Section 122 for a trade deficit will make those tariffs vulnerable to litigation.
“I’m not sure it will necessarily even need to get to the Supreme Court, but if the president adheres to this plan of using a statute that his own Justice Department has said he can’t use, yeah, I think that’s a pretty easy thing to litigate,” Katyal said.
It is unclear who might take the lead in challenging the Section 122 tariffs.
Sara Albrecht, chair of the Liberty Justice Center, a nonprofit, public-interest law firm representing several small businesses that challenged the IEEPA tariffs, said the group would closely monitor any new statutes being invoked.
Albrecht did not reveal any future litigation strategy, adding: “Our immediate focus is simple: making sure the refund process begins and that checks start flowing to the American businesses that paid those unconstitutional duties.”
In its ruling, the Supreme Court did not give instructions regarding refunds; instead, it remanded the case to a lower trade court to determine the next steps.
Vice President Cevdet Yılmaz on Tuesday said overall financial conditions were expected to improve in 2026, adding that the government is aware of financing challenges faced by the real sector and is implementing necessary measures to ease access to funding.
Speaking at the Investment Environment Improvement Coordination Council (YOIKK) meeting in Ankara, Yılmaz said the government remains determined and coordinated in its fight against inflation while seeking to strengthen financial stability.
“As the government, we continue our determined and coordinated efforts to reduce inflation. At the same time, we aim to provide a more solid foundation for the real sector by reinforcing financial stability,” he said.
Türkiye’s annual inflation eased to 30.7% in January. But a monthly spike of nearly 5% in consumer prices triggered market doubts about whether the downward course seen throughout 2025 is on track.
Officials have dismissed those doubts, saying there’s no deterioration in Türkiye’s disinflation path but rather a slowdown mainly due to food prices and seasonal effects.
Yılmaz said the global economy is navigating a period of heightened risk and uncertainty, with geopolitical developments, financial volatility and fragile trade flows directly affecting investment decisions.
Citing data from the United Nations Conference on Trade and Development (UNCTAD), he said leading indicators point to a 14% increase in global foreign direct investment (FDI) flows in 2025. However, much of the rise stemmed from financial transactions among developed economies, and when these are excluded, the real increase stands at around 4%.
FDI flows to developing countries declined by 2%, he added.
“Within such a global outlook, Türkiye has been among the positively differentiated countries, recording a 12.2% increase in 2025,” Yılmaz said, noting that international FDI inflows reached $13.1 billion.
He said wholesale and retail trade ranked first with a 32% share, driven largely by e-commerce investments, followed by manufacturing at 31% and information and communication at 14%.
Focus on quality investments
Yılmaz said the sectoral distribution shows investments are concentrated in areas that strengthen production infrastructure, increase trade volume and enhance technological capacity.
Under Türkiye’s International Direct Investment Strategy, the government continues to prioritize climate-friendly, digital, knowledge-intensive and global supply chain-oriented investments, he added.
Yılmaz said the government expects overall financial conditions to improve in 2026 while continuing selective measures to facilitate access to financing.
“We are aware of the difficulties our real sector faces, particularly in accessing finance, and we continue to implement necessary measures, especially for labor-intensive sectors and SMEs,” he said.
He highlighted a newly announced TL 100 billion ($2.28 billion) financing package aimed at preserving employment in manufacturing enterprises, particularly small and medium-sized businesses (SMEs).
In addition, he said a new program to be launched by the Turkish Employment Agency (IŞKUR) will support youth employment and strengthen labor-intensive manufacturing firms.
Yılmaz said the government’s investment-, employment-, production- and export-oriented policies are designed to reinforce balanced growth and stability while sustainably increasing social welfare.
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