Trump touts economy, urges action on drug costs, trade in State of the Union

By White HouseFOXBusiness

Trump: US economy is the hottest in the world

President Trump discusses the strength of the U.S. economy and the rise in wages during the State of the Union address.

President Trump used his second State of the Union on Tuesday to tout the economic benefits achieved under his administration in the past two years.

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From jobs, to energy production and new trade deals, Trump boasted of his achievements while calling on Congress to build upon initiatives from his administration on health care and back new federal funding for campaigns to eliminate AIDs in the U.S. and encourage new treatments for childhood cancers.

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While the U.S. economy is booming -- adding 304,000 new jobs in January -- top companies are warning of the potential ramifications of Trump's trade skirmish with China, as well as his double-digit tariffs on steel and aluminum.

Those concerns do not appear to have altered Trump's agenda. In the address, he cited the tariffs on Beijing as providing the U.S. Treasury "billions of dollars." Duties in fiscal year 2017 increased by $7 billion, according to federal data.

"I don't blame China for taking advantage of us -- I blame our leaders and representatives for allowing this travesty to happen," Trump said.

In his speech, Trump pressured Congress to broaden the authority of his administration to levy tariffs on countries who impose duties on U.S. goods, a request unlikely to be met given the opposition from both Republicans and Democrats to the existing tariffs.

Below are other key excerpts:

China Trade:

“We are now making it clear to China that after years of targeting our industries, and stealing our intellectual property, the theft of American jobs and wealth has come to an end.”

The White House’s double-digit tariffs on steel and aluminum imports -- along with the levies on $250 billion in Chinese products – are undermining earnings across corporate America, from Caterpillar and Apple, to Ford Motor Co. and Harley Davidson.

TickerSecurityLastChange%Chg
CATCATERPILLAR INC.128.16-1.96-1.51%
AAPLAPPLE INC.217.73-3.23-1.46%
FFORD MOTOR COMPANY9.17+0.07+0.77%
HOGHARLEY DAVIDSON35.27+0.48+1.38%

Negotiations between the Trump administration and Chinese officials continue over a deal to address the trade imbalance between the two countries, as well as Beijing’s forced technology transfer and theft of intellectual property. Treasury Secretary Steven Mnuchin and United States Trade Representative Robert Lighthizer will reportedly travel to China next week to resume discussions, after officials from Beijing visited the U.S. last month.

Should a deal not be reached by the March 1 deadline, Trump is prepared to hike existing tariffs on shipments from China from 10 percent to 25 percent, as well as impose levies on another $267 billion in products – effectively covering all imports from the communist nation.

Trade with Mexico and Canada:

“Our new U.S.-Mexico-Canada Agreement -- or USMCA -- will replace NAFTA and deliver for American workers: bringing back our manufacturing jobs, expanding American agriculture, protecting intellectual property, and ensuring that more cars are proudly stamped with the four beautiful words: MADE IN THE USA.”

Trump called on Congress to pass the trade deal that would, among other things, increase from 62 percent to 75 percent the segment of an automobile that must be made in North America in order for manufacturers to avoid tariffs.

It would also mandate that between 40 to 45 percent of the car be made by employees who receive a wage of at least $16 per hour, a provision that some experts say could shift production away from Mexico.

Drug Prices:

It is unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place. This is wrong, unfair, and together we can stop it."

Last week, the Trump administration unveiled a sweeping proposal to eliminate the opaque drug rebate system, under which discounts are provided by pharmaceutical companies and passed along to pharmacy benefit managers – who then keep a portion and use the remainder to lower prices for consumers.

The White House is also still weighing a controversial proposal to tie federal reimbursement for drugs administered by a physician to international pricing, an idea the administration argues would help address the imbalance between what the U.S. and other countries pay for treatments.

Trump, in his speech, asked Congress to pass legislation to require “drug companies, insurance companies, and hospitals to disclose real prices to foster competition and bring costs down.” He also pledged to request additional resources in his pending budget to try to eliminate AIDS in America and encourage more research for treatments to address childhood cancers.

TickerSecurityLastChange%Chg
PFEPFIZER INC.36.69+0.18+0.49%
MRKMERCK & CO. INC.85.16+1.19+1.42%
ABBVABBVIE INC.72.39+0.72+1.00%
BMYBRISTOL-MYERS SQUIBB CO.50.57+0.50+1.00%

The House and Senate are slated to hold a number of hearings in the coming months on the issue of drug pricing, potentially with CEOs of top companies including Pfizer, Merck, AbbVie and Bristol-Myers Squibb.

U.S. energy:

We have unleashed a revolution in American Energy – the United States is now the number one producer of oil and natural gas in the world.”

By 2020, the U.S. is expected to export more energy than it imports -- an acheivment not reached since 1953 and one that comes as a result of a boom in production of shale oil and natural gas. Underscoring the surge is a 2015 reversal of a law that banned the export of oil from the country.

Trump's comments come as Democrats, including Rep. Alexandria Ocasio-Cortez, D-N.Y., prepare to release a new "Green Deal" that aims to elimiate greenhouse gas emissions while generating new, high-paid jobs. Critics say such a plan would be impossible to acheive and cost trillions of dollars.