A magnificent con

There's at least one foreign country that positively adores how Trump's America First is winning.

I'll let Paul Krugman disclose the identity of our infatuated outlander, as well as the instrument by which the foremost Firster's eyelash-bashing overtures won it over:

The trade deal "triumphantly announced" by Trump this week "tilts the playing field between U.S. and Japanese producers of cars ... in Japan’s favor," begazed Krugman. "If this sounds incredibly stupid, that’s because it is."

U.S. auto manufacturers agreed with the Nobel economist, as somewhat evidenced by The Wall Street Journal's headline, "Detroit Carmakers Blast Japan Trade Deal." That they did, the reason for which we'll get to right after this brief voyeuristic yearning from afar.

"Korean and European carmakers [are hoping] to match the Japanese terms" — you bet they are — reported the Journalabout Trump's come-hither tariff of 15% on the latter's makes and models. The U.S.'s existing 2.5% tax remains, so America Firsters will have the orgasmic pleasure of paying a 17.5% tax on their next Honda or Mazda.

But those Korean and European carmakers figure that's a helluva lot better than the 27.5% added sticker shock they're still stuck with. So they'd very like to crawl into bed with Trump and Japan and thus make a cozy foursome out of a "reduced" but nonetheless 600% tax increase on their exports.

But back to our really pissed-off Detroit automakers, which indeed they are, for they've been forsaken. Here, I'll let the WSJ and Matt Blunt, the head of a group that represents General Motors, Ford and Stellantis, explain:

"[Trump's] tariff reduction is a major win for Japanese automakers," wrote the Journal, "providing them an edge to [his nearly 30%] tariffs on most other car imports from around the world" — meaning, chiefly, cars from Mexico and Canada. For American automakers, that's the kicker.

As Blunt explained: "[The deal] charges a lower tariff for Japanese imports with virtually no U.S. content than the tariff imposed on North American-built vehicles with high U.S. content," that is, those from our neighbors. And so "for U.S. industry and U.S. auto workers,” added Blunt, that's a "bad deal."

Or, as Krugman concisely explained the upshot of domestic carmakers' fury: "[The Japan deal] actually leaves many U.S. manufacturers worse off than they were before Trump began his trade war." That would be, do let us recall, his America First trade war (which, by the way, GM says has cost it more than $1 billion to-date).

Is that the end-all of this particular absurdity in the oceanic swell of Trump's breathtaking stupidity? Not by a long shot.

His secretarial treasure of a fellow bonehead, Scott Bessent, said "the U.S. agreed to lower Japan’s car import rate to 15% because Japan provided an 'innovative financing mechanism' to make a deal happen."

In the real world, what Japan provided was a slick, altogether illusory $550 billion investment in the United States. Its negotiators are, this very day, asking themselves in a state of vertiginous delight, Did we really just pull off the greatest trade scam since China's 2020 bait-and-switch? Yes, guys, you did.

Noted The NY Times in clean detachment: "Some trade experts have pointed out that such investments could take years to appear, or questioned whether they will ultimately materialize."

Uh, no. The Times had political economist Veronique de Rugy reveal the dirty secret. Those investment "promises" ballyhooed by Bessent and Trump too? "[They're] the kind of fantastical claims better suited for a campaign rally than a serious trade announcement."

A reminder about China's scam back in 2020. It was then that Trump announced his theretofore most-dreaded trade foe committed to buying an additional $200 billion of U.S. exports before 31 December 2021. He called this a "historical trade deal " (historic not being one of his "best words"). Take it away, Peterson Institute for International Economics:

"Today the only undisputed 'historical' aspect of that agreement is its failure. In the end, China bought only 58 percent of the US exports it had committed to purchase under the agreement, not even enough to reach its import levels from before the trade war. Put differently, China bought none of the additional $200 billion of exports Trump's deal had promised."

To Trump, no matter. He still boasts that China, because of his 2020 demand, did in fact buy another $200 billion worth of U.S. goods. And why not? After all, few Americans are paying attention. So this year he claimed six times in one week that last year's U.S. trade deficit with China was $1 trillion. The true deficit: about one-fourth of that.

In sum, Japan's top trade negotiator, Ryosei Akazawa, declared on Wednesday what Chinese negotiators undoubtedly said to each other five years ago: "Mission accomplished."