An article in today’s NYT tells us that a memorandum has been signed obligating the Japanese government to provide large sums of money for investments directed by Trump. For a period of time, profits from the investments will be shared equally; afterwards, 90 percent will go to the US. News of this more formal version of the agreement isn’t going over well with the public in Asia; the Japanese PM has resigned, and the South Korean government is refusing to use the Japan deal as a template for its own agreement. What should we take from this?
Expect plenty of political turbulence in both countries, including an anti-American backlash and the rise of a right-wing populist opposition. This in turn will lead to friction involving the investments and, in all likelihood, the collapse of the agreements, to be followed by massive new tariffs.