Who could have imagined that Trump's tariff stick couldn't even scare Japan, and even though the United States sent bombers to Japan to exert pressure, Japan still did not compromise this time.

Moreover, Trump announced that the negotiation location had been transferred from the U.S. Treasury to the White House, and he raised the issue of the cost burden of U.S. troops stationed in Japan," in order to put pressure on Japan. After the negotiation ended, Trump posted on social platforms claiming "major progress," but public opinion generally believed that the first round of negotiations between the U.S. and Japan on tariff issues made no substantial progress.

Agence France-Presse reported that Japan failed to obtain any tariff exemption from the U.S., and it was obvious that there was no immediate breakthrough. Reuters reported that both sides expressed goodwill, but apart from agreeing to meet again, little progress was made.

Therefore, Trump has completely hit Japan's soft spot this time. We all know that the Trump administration will conduct bilateral negotiations with more than 70 countries within the next 90 days to seek solutions for tariffs and trade deficits.

Any normal person understands that whoever comes first and adopts a proactive attitude should receive the most favorable policies and the richest conditions, right? Even demolition offices know to reward those who sign first. So, as one of the first countries to negotiate with the U.S., what did Japan get?

According to reports by The Asahi Shimbun, Japan was directly presented with three specific requirements by the U.S.: First, pay for the costs of U.S. troops stationed in Japan; Second, address the sales issue of American cars; Third, eliminate the trade deficit. There is also an undecided clause where the具体内容 is unclear to the U.S., but you Japan sign first, and they will add this clause later after they figure it out.

To be honest, such terms are so unreasonable that even if the U.S. dropped two more atomic bombs on Japan, Japan wouldn't sign. Even if Japan is pro-American, this agreement is too difficult for them, almost akin to losing national dignity, which is even more absurd than the Plaza Accord. Such terms would only make Japan relive the 30 years of disaster brought about by the Plaza Accord.

In 1985, the U.S. launched an economic war against Japan, forcing Japan to sign the Plaza Accord. U.S. financial experts continuously verbally intervened in the dollar, which once fell to as low as 1 USD to 120 JPY. Within less than three years, the value of the dollar against the yen depreciated by 50%, and Japan began to fall into a bubble economy.

Therefore, Japan is unwilling to agree this time around. Although Japan promised the U.S. that its government would not sell U.S. bonds, it did not prevent the private sector from selling U.S. bonds. As the largest overseas holder of U.S. Treasury bonds (with holdings of approximately $1.27 trillion), Japanese institutions holding U.S. bonds are selling them in droves. At one o'clock in the morning, institutions in Japan were still listing $20 billion worth of U.S. bond sell orders.

As a transit trade country, a sharp devaluation of the exchange rate would increase the cost of importing raw materials while reducing the export prices, which is cutting off its own flesh. Therefore, Japan must maintain the exchange rate within the range of 130-150. For a transit trade country, drastic fluctuations in exchange rates are very dangerous, stability is required. The Bank of Japan currently has little USD, so it can only rely on selling U.S. bonds to acquire more USD to defend the yen's exchange rate in future currency wars.

Selling U.S. bonds is like striking at America's Achilles' heel. If Trump really pushes Japan too far, and if the Japanese government officially joins in selling U.S. bonds, along with the $6.5 trillion maturing in June, U.S. bonds could collapse. At that point, Trump would be in big trouble.

Because the essence of the dollar is a credit system built on hegemony. The credit foundation of the dollar is not based on industrial and agricultural output, nor on past financial credibility in the U.S. The U.S.'s own credibility is not good enough to support the dollar. If the U.S. had abandoned gold conversion back then, other currencies would have collapsed immediately, but the dollar not only continued to exist but became increasingly powerful.

Why is this so? The reason is simple. It’s not that the world trusts the dollar, but rather that the world has no other choice. Apart from the dollar, you have no other option. You just have to choose the dollar.

Therefore, if there isn't a widely accepted currency to replace the dollar in the world, large-scale selling of U.S. bonds, once triggering the collapse of the dollar system, would impact the entire global economic market.

If Japan, the closest ally, cannot reach an agreement, what chance do other countries have of succeeding? Then, it might lead to a global wave of opposition against the U.S.

Currently, for Trump, it's a dilemma of advancing or retreating. If he doesn't severely punish Japan, other countries will know that Trump is bluffing. If he maintains a tough stance towards Japan, for a highly import-dependent Japan, the only way is to embrace the Chinese market.

Especially now, Japan has started planning to visit China. In the past, the Japanese government flattered the U.S. but gained no substantial benefits, and even earned a bad reputation, leading to a significant decline in its international image. Now, the U.S. is forcing Japan to betray its country. If Japan kneels again, even if Japan is sold out entirely, it won't satisfy Trump's appetite. It's better to cooperate with China and find a new path from here.

If even such a pro-American ally like Japan chooses China, what about other countries? Ultimately, Trump's attempt to isolate China through the tariff war will only end up isolating himself completely.

Original source: https://www.toutiao.com/article/7494690846941315619/

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