The Price of Winning the Trade War

The Japan deal is a relief, but only because the alternative is worse. 

WSJ editorial. Excerpts:

"That $550 billion in new Japanese investment also sounds better than it may be once we know the details. Japanese Prime Minister Shigeru Ishiba suggested Tokyo will offer government loans and guarantees to support these “investments,” with the aim “to build resilient supply chains in key sectors.”

This raises the prospect that this money, if it arrives, will be tied up in Japanese industrial policy. And American industrial policy, since Mr. Trump said Japan will make these investments “at my direction” and the U.S. “will receive 90% of the Profits.” Yikes.

By the way, more investment inflows by definition mean a larger trade deficit in the U.S. balance of payments. Has someone told the President about this?"

"Yet the 15% rate still marks a substantial increase over the 2.5% tariff that applied to passenger cars before Mr. Trump took office."

"Mr. Trump is showing the world that the U.S. can change access to its market on presidential whim. Countries will diversify their trading relationships accordingly, as they already are in new bilateral and multilateral deals that exclude the U.S. China will expand its commercial influence at the expense of the U.S."

"It retaliated against Mr. Trump’s 145% tariffs with export restraints on vital minerals, and Mr. Trump agreed to a truce."

"the average U.S. tariff rate may settle close to 15% from 2.4% in January."