In his 80-minute prime time address, Trump laid out a four-pillar immigration plan, one of the major debates that loomed over his first year in office, and sought the backing of the Congress for a merit-based immigration system that admits skilled people, a proposal that could benefit technology professionals from countries like India.
He also outlined a plan that would allow up to 1.8 million undocumented immigrants to remain in the country while funding a border wall with Mexico, ending the visa lottery system and reforming family immigration rules.
While keeping mum on the ongoing investigations into his his election campaign's ties to Russia, Trump appealed to the Democrats and Republicans to look past deep national divisions in order to do good by the American people.
He warned that "rivals" like China and Russia were challenging America's interests, economy and values.
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"As we rebuild America's strength and confidence at home, we are also restoring our strength and standing abroad. Around the world, we face rogue regimes, terrorist groups, and rivals like China and Russia that challenge our interests, our economy, and our values," he said.
The US must modernise and rebuild its nuclear arsenal, he said, hoping that he would never having to use it. But the America's defence should be made "so strong and powerful that it will deter any acts of aggression," he said.
In his speech, laced with American stories of triumph and tragedy, Trump said it was not enough to come together only in times of tragedy.
"I am extending an open hand to work with members of both parties Democrats and Republicans to protect our citizens of every background, colour, religion, and creed," Trump said as US First Lady Melania Trump and other dignitaries watched.
Unlike his apocalyptic "American carnage" inaugural speech of just a year ago, Trump said his administration is "building a safe, strong and proud America".
"This is our new American moment. There has never been a better time to start living the American Dream," he said.
Trump said that his proposal should be supported by both parties (Republican and Democratic) as a fair compromise -- one "where nobody gets everything they want, but where the country gets the critical reforms it needs".
"Under our plan, those who meet education and work requirements, and show good moral character, will be able to become full citizens of the United States," Trump said, proposing a pathway to the 'Dreamers'.
"Most importantly, these four pillars will produce legislation that fulfills my ironclad pledge to only sign a bill that puts America first. So let us come together, set politics aside, and finally get the job done," he said.
In his address, Trump said unemployment claims have hit a 45-year low while small business confidence is at an all-time high. The stock market has smashed one record after another, gaining USD 8 trillion in value, Trump, who is facing historically low approval ratings, said.
In his speech, Trump called on lawmakers to approve a USD 1.5 trillion infrastructure package.
He said his administration has slashed the business tax rate from 35 per cent to 21 per cent, so American companies can compete and win against anyone in the world.
President Trump warned that North Korea's "reckless pursuit" of nuclear missile could threaten American cities, and asserted that he will not "repeat the mistakes" of past administrations that got the US into "dangerous position".
"North Korea's reckless pursuit of nuclear missiles could very soon threaten our homeland. We are waging a campaign of maximum pressure to prevent that from happening," he said.
Trump said last year he pledged that he would work with US allies to extinguish the Islamic State terror group from the face of the Earth.
"One year later, I am proud to report that the coalition to defeat ISIS has liberated almost 100 per cent of the territory once held by these killers in Iraq and Syria. But there is much more work to be done. We will continue our fight until ISIS is defeated," he said.
"Along with their heroic Afghan partners, our military is no longer undermined by artificial time-lines, and we no longer tell our enemies our plans," he said.