Mere days after the Supreme Court struck down his tariff agenda, President Donald Trump continued to tout the benefits of his protectionist policy during his State of the Union address. Trump’s speech Tuesday night included several false claims about tariffs as well as trade deals and investment pledges he has procured, and he made other false statements about the economy more broadly.
Claim: Biden administration ‘gave us the worst inflation in the history of our country.’
“The Biden administration and its allies in Congress gave us the worst inflation in the history of our country,” Trump said early in his speech, as he listed his accomplishments from the first year of his presidency. “But in 12 months, my administration has driven core inflation down to the lowest level in more than five years. And in the last three months of 2025, it was down to 1.7 percent.”
That former President Joe Biden oversaw the worst inflation in history is a frequent—and false—claim by Trump. He made a similar statement one year ago in his address to a joint session of Congress. As The Dispatch Fact Check reported at the time:
The U.S. did experience high inflation during Biden’s stint as president, but it was not as historically significant as Trump claims. Month-to-month inflation—as calculated by percentage change in the consumer price index (CPI), which measures price changes for a basket of goods and services—hit a high of 9.1 percent in June 2022. Inflation remained at or above 6 percent for 17 consecutive months between October 2021 and February 2023.
That’s not a 48-year record. Inflation sat above 9.1 percent from January 1979 to November 1981, with a high of 14.8 percent in March 1980. But that wasn’t an all-time record either. Since the Bureau of Labor Statistics began tracking CPI data in 1913, the highest single-month inflation came in June 1920 at 23.7 percent.
During his address, Trump also said over the last 12 months his administration had driven inflation down to its “lowest level in more than five years,” adding that in the last three months of 2025 inflation decreased to 1.7 percent.
Trump’s claim that inflation is at its lowest level in five years is largely true. The Bureau of Labor Statistics reported last week that the consumer price index (CPI) showed prices increasing 2.39 percent for the 12 months ending in January 2026. The CPI stood at 2.6 in March 2021 and did not dip below that throughout the remainder of Biden’s term, except for a brief dip in September 2024 when it was at 2.42.
His claim about core inflation dropping to 1.7 percent for the final quarter of 2025 is harder to parse and requires context. Data on inflation rates is not released quarterly, and as the financial publication Barron’s notes: “The calculation, which the administration has used before, is based on the average of the annualized rates of monthly CPI growth. That is different from official standard calculations. The Bureau of Labor Statistics calculates the change in the consumer price index compared with one year earlier.”
Claim: Trump secured $18 trillion in foreign investments.
“In 12 months, I secured commitments for more than $18 trillion pouring in from all over the globe,” Trump said in citing another self-proclaimed accomplishment. This is another claim he’s made before. In a Wall Street Journal op-ed from January 30, Trump wrote that he had wielded the “tariff tool to secure colossal Investments in America,” obtaining $18 trillion in investments from across the globe.
As Dispatch Contributing Writer and Cato Institute Vice President Scott Lincome wrote just last week, Trump’s numbers do not align with his own White House’s data, which cites $9.7 trillion.
Lincicome noted that while the $18 trillion is an exaggeration, there is reason to believe that even some of the investment that the administration has documented won’t happen:
Some of those commitments, moreover, relate to military equipment that foreign governments (e.g., Saudi Arabia) already wanted to buy. Others, such as India’s promises to stop buying Russian oil and start buying U.S. liquid natural gas, might never happen for practical and geopolitical reasons. Others still—as is the case of the EU’s purchase promises—simply can’t happen because government officials in these places don’t have the authority to control private firms’ purchasing decisions.
Further, Lincicome wrote, some of the commitments aren’t new:
Companies routinely repackage already-committed spending to curry favor with a new president, and various reports indicate that many of the “Trump Effect” investments fit that bill. Here in North Carolina, for example, several major pharmaceutical investments have been planned for years now, thanks in large part to the GLP-1 drug frenzy. Bloomberg’s analysis also finds that about 83 percent of the corporate investment pledges ($2.9 trillion of the total $3.5 trillion) listed by the White House are related to artificial intelligence and the huge data-center buildout. That spending is most definitely real and consequential, but it just as definitely wasn’t caused by Trump’s tariff threats.
Claim: Tariffs will replace income taxes.
Trump denounced the Supreme Court decision last week that found he lacked authority to impose tariffs under the International Emergency Economic Powers Act of 1977, and he vowed to continue his tariffs policy under different statutes. “[The statutes are] a little more complex, but they’re actually probably better — leading to a solution that will be even stronger than before,” he said. “Congressional action will not be necessary. It’s already time-tested and approved. And as time goes by, I believe the tariffs, paid for by foreign countries, will, like in the past, substantially replace the modern-day system of income tax, taking a great financial burden off the people that I love.” (For a primer on the statutes Trump could cite to impose tariffs without congressional action, see Matthew Mitchell’s Dispatch article from February 23.)
Trump’s claim that tariffs are “paid by foreign countries” is false. A report issued February 12 issued by the Federal Reserve Bank of New York calculated that Americans bore 94 percent of the cost of Trump’s tariffs.
As for the president’s assertion that tariffs could replace the income tax, Lincicome said in an interview Wednesday with The Dispatch Fact Check that this idea is “untethered from reality.”
In 2025, tariffs—which had an annual overall average of 8.7 percent according to the Budget Lab at Yale—brought in an estimated $194.8 billion in inflation-adjusted revenue, while revenue from individual federal income taxes totaled $924 billion. The U.S. imported $4.3 trillion in goods and services in 2025, meaning that tariffs would have to top 46 percent, roughly, to replace income taxes. That’s a hypothetical, of course, but even then, the federal government most likely would not be able to raise the revenue necessary for its current budget.
“You would need a lot more imports than what we now have to get even close to the amount of revenue needed to replace the income tax,” Lincicome told The Dispatch Fact Check. “[And] as you increase tariffs, you decrease imports. So there is a hard limit to the magnitude of an import tariff before it starts to actually block [revenue].”
The Dispatch Fact Check reached out to the White House for comment, but the press office declined to provide further sources for the president’s claim of $18 trillion in investment or calculations showing how tariffs could replace income taxes.