The Trade Deal With Japan

Earlier today, I wrote about the possibility of where the trade disputes with China were going.  Then, just now, things changed greatly as President Trump and Prime Minister Abe of Japan announced agreement in principle on a trade pact between the two nations.  The full details have not yet been released, and there are still some small details being ironed out, but the US/Japan pact should be signed by the end of September.  One item the pact changes is that Japan is going to buy huge amounts of American farm products.  This will take up the slack created by the Chinese in their recent tariff imposition.  In other words, the pact with Japan will obliterate much of the effect of the Chinese action.  As I said earlier today, the market for agricultural products will redirect American goods to other buyers.

This US pact with Japan is very bad news for China and very good news for the USA and Japan.