Trump’s tough tariff strategy is yielding

Japan is a big deal for President Donald Trump’s turmoil over the world’s trading system.

As far as he is concerned, it can now be said that his aggressive approach is achieving tangible results.

From the forthcoming, the U.S. side has been talking about the opportunity to reach a deal with Japan, but despite several delegations, the deal remains elusive – until now.

In a narrow sense, this is a victory for the Trump approach, especially if Japan becomes the domino that leads the rest of the world to gradually line up.

Now, Japan has the best deal, or the worst deal, of all countries with the major trade surplus with the United States.

The total fee for importing Japanese goods to the United States is higher than 10% of the United Kingdom, but the United Kingdom has no surplus.

As I have reported earlier, Washington, D.C. diplomats are used to the anger of Washington, D.C. diplomats who are used to the country’s extremely politeness.

Tokyo is playing hard ball. The Japanese Treasury Secretary held $1.1 trillion in bonds, the largest U.S. Treasury Department, as a “card” that can be placed on the table.

It’s a rumor about Japanese hedge funds selling U.S. bonds in Japan following the April “Liberation Day” tariff announcement, which triggered a wider sell-off and raised bigger questions about the world’s largest economy and the safe haven status of the dollar.

Therefore, the deal reached is very important in itself and is a role model for other major economic groups, including the European Union (EU).

The deal comes the day when Japan hosts the EU leader in Tokyo. Chats about Japan, the EU and Canada are constantly coordinating their revenge. This stops any such initiatives.

Some EU members will wonder why similar deals cannot be reached in the moment Germany and France retaliate, perhaps against the American tech giant.

The world is here to wait for details, but it is clear that Japan has protected its agricultural imports, although it will import more American rice.

It is unclear how to change the popularity of large American cars, although Japanese private companies will somehow support investment of half a trillion dollars in the U.S.

Japan completed the deal when it might have been waiting to see how things were going, and the international market reaction when many countries that came into effect on August 1 were in effect.

The PM’s domestic political weakness may be a factor, although other countries, including Indonesia and the Philippines, have also reached deals.

The big picture, though, is tired of the U.S. levied, because fears that it would be worse, the unimaginable tariffs on its main allies a year ago.

In Japan, that’s a 25% tariff that Trump threatens.

Now, tariffs are raising a large amount of money for the U.S. Treasury Department without retaliating against U.S. exporters. So far this year, about 5% of U.S. federal revenue comes from tariffs, and usually more than 2%.

U.S. Treasury Secretary Scott Bessent believes that the annual tariff costs $30 billion.

This is far from the amount raised by income tax, but is significant. It was carried out without direct revenge, and there is no current market turmoil.

However, the story is not over. Who actually paid these tariffs? U.S. consumers will eventually pay a significant portion of the price they pay for imported goods.

In the past, Bessent and others have suggested that the rise in the value of the dollar will help reduce consumer import costs. The opposite happened.

The dollar fell in the first half of this year, losing 10% of its value a basket of world currencies. In addition to tariffs, this will also increase import costs.

There are also wider canvases here. Bank of England Governor Andrew Bailey said this week that “the most crowded trade in the market is the ‘short dollar’.

He added that the safe haven model established in the market, especially the dollar market, is “intrinsically collapse.”

The governor said the “reduced exposure” to the dollar when companies and traders now take trade or “heedges” that are intended to ensure their decline.

As I discussed earlier, there is doubt in the market that this weak dollar may actually be part of these interventions designed to help improve the competitiveness of U.S. rust-skin manufacturers.

Most importantly, the United States also helped its great rival China to bring cases to at least the rest of the world to make it a more stable trading partner.

Japan is a major victory for the White House for the first phase of the huge global trade war, which would object to the suggestion of “Trump is always chicken” or tacos.

While it could also translate into a more obvious victory by next week’s deadline, driving further market euphoria, the broader economic situation remains more blurred.