Writing a GR update 24 hours before President Trump gives his State of the Union (SOTU) address is a difficult task. No one has a crystal ball into what he will say, nor how the Democratic members of Congress will express their certain opposition. However, I will make a few observations. 

Tariffs Are Taxes: After the Supreme Court dealt a clear and decisive repudiation to Trump’s use of emergency powers to impose taxes in the form of tariffs (more on that below) we have learned a few things. Trump’s purpose of those tariffs is evolving. Initially pursued to “level the playing field” and spark a negotiating process, they now seem more clearly to raise revenue. Trump’s move over the weekend to initiate Section 122 blanket tariffs up to 15% suggests the era of negotiating trade deals is done. Trump’s rhetoric on refunds will be interesting over the next few days. He has an amazing opportunity to add billions of dollars of stimulus to the economy at the most efficient level; by giving those refunds back to the business that paid the duty and processing those claims quickly. Will he choose to stimulate the economy or keep the money?