‘I inherited a mess, and I’m fixing it’: Trump vows economic boom, blames Biden in address to nation

WASHINGTON – US President Donald Trump promised Americans an economic boom
in an address to the nation on the night of Dec 17, while blaming Democratic predecessor Joe Biden for high prices that have hit the Republican’s popularity.

“Good evening, America. Eleven months ago, I inherited a mess, and I’m fixing it,” the 79-year-old said in his live speech from the White House at the end of his first year back in power.

Mr Trump faces growing voter anger over the issue of affordability despite his efforts to dismiss it as a “hoax” by Democrats, sparking Republican fears they could be punished in the 2026 midterm elections.

The billionaire leader insisted that prices of petrol and groceries that have worried Americans were “falling rapidly, and it’s not done yet. But boy, are we making progress”.

In a surprise announcement, Mr Trump said 1.45 million US military service members would each receive “warrior dividend” bonus cheques for US$1,776 (S$2,300) before Christmas, paid for with revenues raised from tariffs.

He added that the specific amount was in honour of the year of the founding of the US, the 250th anniversary of which the country will celebrate in 2026.

Mr Trump then promised that “we are poised for an economic boom the likes of which the world has never seen” in 2026, when the US will co-host the FIFA World Cup with Canada and Mexico.

But while the White House had billed the speech as a chance for Mr Trump to set out his economic agenda for the rest of his second term, much of it consisted of attacks on familiar targets.

He repeatedly raged against Mr Biden, the Democrats and migrants who he said “stole American jobs”.

Mr Trump’s speech comes at the end of a whirlwind year in which he has launched an unprecedented display of presidential power, including a crackdown on migration and the targeting of political opponents.

Tariff impact

Many economists say Mr Trump’s tariffs have contributed to higher prices for some goods, though the overall impact has been much less than many forecasters predicted earlier in 2025. Mr Trump, on Dec 17, argued his tariffs are delivering economic gains and luring investment in domestic manufacturing. 

Still, Mr Trump’s speech offered a muddled message on price levels. He said at one point that he was “bringing them down very fast”, before later acknowledging ongoing inflation that he said was outpaced by wage growth.

Mr Trump also heralded his tariff barrage, indicating it would fund the payments to military members and had been a useful cudgel in settling conflicts abroad – though the levies are import taxes that historically raise costs.

Adding to his woes, US hiring has been lacklustre in recent months, with any gains largely propelled by steady hiring in healthcare.

The latest jobs report showed employers added 64,000 jobs in November, thanks to healthcare hiring and the strongest advance in construction employment in more than a year. But manufacturers shed jobs for a seventh straight month.

Poll worries for Trump

Polls show that Americans are most concerned about high prices, which experts say are partly fuelled by the tariffs the President has slapped on trading partners around the world.

The inflation problem also dogged Mr Biden as he tried to heal the US economy after the Covid-19 pandemic, and the Democrat unsuccessfully tried similar arguments with voters about economic good times to come.

Mr Trump got his worst approval ratings ever for his handling of the economy in a PBS News/NPR/Marist poll published on Dec 17, with 57 per cent of Americans disapproving and expressing concerns about the cost of living.

A YouGov poll published on Dec 16 showed that 52 per cent of Americans thought the economy was getting worse under Mr Trump.

He has also faced criticism from his Make America Great Again, or MAGA, movement for focusing on peace deals in Ukraine and Gaza and on tensions with Venezuela, instead of domestic issues.

There are signs Mr Trump’s team has had a wake-up call on the economy in recent weeks, with the 2026 midterm elections for control of Congress already looming.

Republicans lost heavily in elections in November for the mayor of New York and governorships in Virginia and New Jersey, while Democrats ran them close in a previously safe area in Tennessee.

The President is now ramping up his domestic travel to push his economic message.

Last week in Pennsylvania, he promised to “make America affordable again”, and on Dec 19, he is due to give another campaign-style rally in North Carolina.

Vice-President J.D. Vance – who is rapidly becoming Mr Trump’s messenger on the issue as he eyes his own presidential run in 2028 – also urged voters to show patience during a speech on Dec 16.

Next chairman of US Federal Reserve

Mr Trump said on Dec 17 that the next chairman of the US Federal Reserve will be someone who believes in lower interest rates “by a lot”.

“I’ll soon announce our next chairman of the Federal Reserve, someone who believes in lower interest rates, by a lot, and mortgage payments will be coming down even further,” he said.

He had previously indicated that he would announce his chosen successor to current Fed chairman Jerome Powell early in 2026.

All of the known finalists – White House economic adviser Kevin Hassett, former Fed governor Kevin Warsh and current Fed governor Chris Waller – advocate for interest rates to be lower than they are now.

None, however, has expressly indicated they would push the US central bank to slash rates as low as Mr Trump has demanded, in some cases to as low as a crisis-level 1 per cent. The current Fed rate ranges from 3.5 per cent to 3.75 per cent, and not even his latest appointee, governor Stephen Miran, advocates for a rate anywhere near that low.

Mr Trump has repeatedly expressed a desire for lower mortgage rates, but the interest rate the Fed controls has only a limited effect on longer-term borrowing costs. Those are more typically influenced by longer-term rates the Fed has less sway over, such as the 10-year Treasury note yield.

That rate is moved by investors’ expectations for US economic growth and inflation, and on balance has changed little in the last year. Mortgage rates have been stuck in the 6.3 per cent to 6.4 per cent range since Labour Day and show little indication of moving lower.

Healthcare website launch

Healthcare also poses a particular challenge, with expected cost increases for millions of Americans. Enhanced subsidies under the Affordable Care Act are slated to expire at the end of 2025, and Congress is deadlocked over how to address the issue.

Mr Trump backed a Republican proposal to send cash directly to the public to offset the cost of health insurance, rather than provide subsidies through the Affordable Care Act. That proposal has yet to receive enough support in Congress.

“I want the money to go directly to the people so you can buy your own healthcare,” he said. “The only losers will be the insurance companies.”

Mr Trump depicted his opposition to extending the subsidies as an effort to take on health insurance companies, though many questions remain about how his strategy would work and if it could deliver cheaper or better health outcomes.

“The money should go to the people, that’s you, so they can buy their own health insurance, which will give far better benefits at much lower cost,” he said.

He also touted his plans to launch a new website in 2026 that allows Americans to buy discounted prescription drugs directly from the government. Numerous pharmaceutical companies have offered to participate in exchange for tariff exemptions.

Focus on foreign policy issues absent

Notably absent from Mr Trump’s speech was a major focus on foreign policy issues that have captured a significant share of his second term in office.

Heading into the remarks, Trump allies had speculated about how prominently the speech would focus on an escalating confrontation with Venezuela.

Mr Trump has ramped up pressure on the South American nation’s leadership in recent weeks, and on Dec 16, he ordered a “blockade” of all sanctioned oil ​tankers entering and leaving the country. It is not clear whether he intends to try to force out Venezuelan President Nicolas Maduro.

That question was not answered on Dec 17. Instead, Mr Trump focused largely on the economy, allowing himself ​only a short victory lap for his work on the Middle East and peacemaking generally.

The President’s allies have warned his aides in recent weeks that he needs to shift focus from international conflicts to kitchen-table issues, according to a person familiar with the matter.

Whether he was effective or not, for at least 18 minutes on the night of Dec 17, he seemed to heed the advice.

AFP, REUTERS, BLOOMBERG