President Donald Trump took center stage in the Capitol Building on Tuesday, to proclaim what he claimed were his administration’s successes just six weeks into his second term.
The address comes at a shaky time for U.S. markets, as a relaunched trade war—particularly new tariffs on Canada, China, and Mexico—has erased all the S&P 500’s gains since the election in November, and also as recession indicators are starting to flash warnings of a coming slowdown. The president himself admitted that his new tariffs might lead to “a little disturbance,” but said the U.S. needed to push back against “tremendously higher tariffs” imposed by other countries on American goods.
“Now it’s our turn,” he said.
In his speech Trump pointed to three deals that he claimed were proof of how his officials were successfully bringing jobs back to the U.S., opening up new markets, and ensuring U.S. security.
‘Trillions of dollars’ for natural gas
First, the president boasted that countries like Japan and South Korea were prepared to spend “trillions of dollars” on a petroleum pipeline in Alaska, as the U.S. state tries to unlock one of the world’s largest reserves of natural gas.
“My administration is also working on a gigantic natural gas pipeline in Alaska, among the largest in the world, where Japan, South Korea, and other nations want to be our partner—with trillions of dollars being spent by them. It will truly be spectacular,” Trump claimed, without giving further details.
Trump declared a national energy emergency on his first day in office, arguing that the U.S. could sell its unrealized energy resources to allies.
In February, Trump said he spoke “at length” with Japanese Prime Minister Shigeru Ishiba about the Alaska gas pipeline project, leading to a joint venture announcement. And earlier on Tuesday, South Korean news agency Yonhap reported that South Korea’s industry minister, Ahn Duk-geun, had agreed to establish a working group with the U.S. to tackle the Alaska gas pipeline project, as well as other issues like tariffs and shipbuilding.
Both Japan and South Korea currently import large amounts of liquefied natural gas (LNG) from various sources, including the U.S. Yet American gas is pricier, with higher logistics costs and longer transport times compared with the Middle East or other Asian sources. (Japan also gets gas from Russia, controversial after Moscow’s invasion of Ukraine in 2022.)
The expensive pipeline project—expected to cost at least $40 billion—would transport natural gas from Alaska’s North Slope over 800 miles to an LNG terminal in the south of the state.
Proponents of the pipeline argue that the project will bring cheap and reliable gas to both domestic and foreign buyers, while boosting the economy. Yet with its expected $40 billion price tag, the state has struggled to attract investors.
The pipeline has been in a holding pattern for years—sometimes reemerging with a different set of backers. In 2017, then–Alaska governor Bill Walker invited three Chinese state-backed firms to help build the pipeline. His successor scrapped the deal a few years later on safety concerns.
But in early February, Alaska Sen. Dan Sullivan threatened that his state might approach China for funds if allies like South Korea and Japan refused to back the project.
“If the Chinese want to step up and be an anchor tenant, and there’s a lot of private-sector interest now trying to make that happen … Maybe that’s the route we go,” he said.
‘CHIPS Act is a horrible, horrible thing’
Later in his address, Trump pointed to Taiwan Semiconductor Manufacturing Co.’s promise to invest an extra $100 billion in U.S. chip manufacturing, adding to the $65 billion already pledged. The Taiwanese company, the world’s largest contract chipmaker, said on Monday it will expand its existing Arizona facilities with five new plants.
Trump’s predecessor, Joe Biden, shepherded the CHIPS and Science Act through Congress, which set aside billions in government subsidies to encourage domestic chip manufacturing. TSMC, Intel, Micron, and other chipmakers then announced plans to build new plants in the U.S.
The current U.S. president, however, credited a different approach to winning over TSMC. “We are not giving them any money,” Trump claimed, blasting Biden’s CHIPS Act as “a horrible, horrible thing.”
Instead, the U.S. president credited his tariff threats, including on Taiwan-made semiconductors. “All that was important to [TSMC] is that they didn’t want to pay the tariffs,” he said. “We don’t have to give them money … They will come because they won’t have to pay tariffs if they build in America.”
Earlier on Tuesday, long before Trump’s address, officials in Taiwan—the home of TSMC—brushed off their national champion’s promise to invest more in the U.S. TSMC’s expansion plans “have nothing to do with tariffs,” economy minister Kuo Jyh-Huei told reporters.
“The manufacturing in the U.S. is primarily for the American clients, in Japan for Japanese clients, and in Taiwan for customers from various other countries,” he added. “It’s unlikely the entire supply chain will shift from Taiwan in the long run.”
TSMC’s new plants are “a stronger signal that TSMC’s investments are not commercially driven,” Phelix Lee, a semiconductor analyst for Morningstar, wrote in a Wednesday note. “TSMC has previously said construction and manufacturing are both more expensive in the U.S., as well as its preference to keeping R&D and manufacturing close in Taiwan.” He predicted that TSMC will have to “convince customers to pay even more” in order to maintain profitability.
‘Reclaiming the Panama Canal’
Finally, Trump celebrated a deal that puts ports surrounding the Panama Canal back in U.S. hands. On Tuesday, a consortium of investors, led by U.S. asset manager BlackRock, agreed to buy control of Hutchison Ports, which operates ports on either end of the critical waterway, from Hong Kong–based conglomerate CK Hutchison.
Trump has suggested the U.S. should retake control of the Panama Canal, currently under Panamanian sovereignty. The president has pointed to CK Hutchison’s control of the canal’s ports as evidence of Chinese control, and suggested that China could restrict the movement of ships through the waterway.
“We didn’t give it to China, we gave it to Panama, and we’re taking it back,” Trump told Congress on Tuesday, arguing that the Canal was “built by Americans for Americans.”
The U.S. returned the canal to Panama on Dec. 31, 1999, following a treaty signed by President Jimmy Carter in 1977. The treaty allows all ships to use the canal for peaceful passage. A separate treaty between the U.S. and Panama allows the former to use military force to defend the canal’s neutrality.
As part of its deal with BlackRock, CK Hutchison is transferring its controlling interest in Hutchison Ports, including a 90% stake in the Panama Ports Co. (The Panamanian government will still need to approve the deal.) The Hong Kong conglomerate operates 43 ports in 23 countries; CK Hutchison’s operations in Chinese ports will not be sold to BlackRock.
The total value of the deal is worth $22.8 billion, which is more than the entire market value of CK Hutchison.
While Trump praised the deal in his address, CK Hutchison could be getting the better end of the arrangement. The conglomerate’s shares surged by over 20% in Hong Kong trading, adding an extra $4 billion to its market value.
Dan Baker, a senior equity analyst at Morningstar, wrote Wednesday that the sale “greatly exceeds our expectations,” noting that the firm valued Hutchison Ports at just $10.5 billion. CK Hutchison said it’s getting more than $19 billion in cash from its BlackRock deal.
CK Hutchison’s ports division is the smallest part of the conglomerate’s business, which also includes interests in retail, telecoms, and energy.
The BlackRock deal is a “perfect example of turning geopolitical risks into opportunities,” Gary Ng, senior economist at Natixis, told Bloomberg, as CK Hutchison could now “sell its port business at a premium.”
