The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Gabriel Rubin

WASHINGTON, July 23 (Reuters Breakingviews) - Japan might have found the winning formula for securing access to U.S. markets: put Donald Trump in charge. As part of a tentative trade deal announced on Tuesday, the president touted a new $550 billion Japanese fund that will, “at my direction,” invest in American projects. If it happens, Prime Minister Shigeru Ishiba – like industrial titan Nippon Steel before him – may hand Trump unusually personal sway over huge sums of capital. Entrenching this trend would put coherent policy goals at the mercy of presidential whim.

Details of any trade deal struck with this White House have a habit of remaining murky right up to their ratification. Still, if the announcement holds, Japan will have secured key goals. The agreement would lower tariffs from a previously proposed 25% to 15%, including on autos. Ostensibly, that means Japanese car imports may face lower levies than those from Canada and Mexico, where American firms have built out integrated North American supply chains. A trade group representing Detroit carmakers Ford Motor, General Motors and Stellantis criticized the deal, noting the obvious contradiction for an administration that vaunts its focus on championing U.S. firms.

The cost to those companies from spiraling levies is becoming clearer, with GM on Tuesday reporting a $1 billion hit to profitability. For consumers, tariffs augur upward pressure on prices, just as confidence wanes. Yet the White House may have secured what is emerging as one of its key aims. While the fine details of the $550 billion fund, which Ishiba said will include loans and guarantees backed by the Japanese government, are still uncertain, the promise of control for Trump follows recent precedent. The president once opposed the $14 billion acquisition of national champion United States Steel by Japan’s Nippon Steel, only to bless the transaction on the condition that the government won a “golden share” conferring veto rights over certain decisions, including pricing. That power was awarded to Donald Trump, personally, even shifting it to a committee when he is no longer president.

Embedding such power in corporate and multilateral agreements hastens the transformation of U.S. policy into a game of satisfying one man’s whims. Tariffs distort markets enough even without adding state capture to the mix. The result may be more incoherence and more outcries from the manufacturers that Trump’s trade war was supposed to benefit.

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CONTEXT NEWS

The United States and Japan reached a tentative trade deal on July 22, according to a social media post by President Donald Trump and confirmed by the Japanese government.

The agreement includes reducing a previously proposed 25% tariff on Japanese imports to 15% in return for various measures, including establishing a $550 bln investment fund that will be directed by Trump, according to the post.

A group representing major U.S. automakers criticized the agreement. "Any deal that 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 is a bad deal for U.S. industry and U.S. auto workers," said Matt Blunt, head of the American Automotive Policy Council.

(Editing by Jonathan Guilford; Production by Maya Nandhini)

((For previous columns by the author, Reuters customers can click on RUBIN/gabriel.rubin@thomsonreuters.com))