As part of his trade deal with Japan, Trump claims that he will oversee a $550 billion investment fund, and the federal government will retain the profits.

As George Will recounts in a recent column, Donald Trump has deployed a range of open-ended executive powers to reshape global supply chains at will, extract favors from firms seeking either exclusion or protection from tariffs, threaten price controls, effectively nationalize private companies, and more. When given the choice between spontaneous order — allowing private individuals to allocate and consume scarce resources as they see fit — or exercising personalist control over economic decisions, Trump often opts for the latter.

Through his newly announced “trade deal” with Japan — under which Americans will have the privilege of paying 15 percent more for Japanese goods than they did before — the president has taken to new heights his effort to micromanage the U.S. economy. Trump’s press secretary, Karoline Leavitt, says that the “centerpiece” of the deal is a new $550 billion investment fund that will pour Japanese money into private U.S. companies. The details of this fund — which Trump thinks of as a “signing bonus” — are astonishing. Let us go over how this thing is supposed to work, according to the White House:

Japan, already the greatest source of foreign direct investment in the United States, will put over half a trillion dollars into a new investment fund. That fund, in Leavitt’s words, will be invested in U.S. companies and projects “at President Trump’s discretion,” who will supposedly funnel Japan’s money to “key industries such as energy, semiconductors, critical minerals, pharmaceuticals and shipbuilding.” Once those investments start bearing income (assuming they ever do), the U.S. federal government “will retain 90 percent of the profits.”

I’m sorry, Japan is going to invest half a trillion dollars in America but can only keep 10 percent of the profits? And who gets 90 percent of the losses?

And Donald Trump is going to have unilateral control over how this money is invested? Without any law from Congress authorizing this fund? 

Japan is extremely unlikely to fulfill this commitment, to put it lightly. Apparently, the fund was included in trade negotiations to placate Trump and induce him to agree to a lower tariff rate on Japanese imports. In all likelihood, it’s an empty promise that will quickly be forgotten.

But suppose for a moment that this investment fund does actually materialize. The president of the United States would have total control over $550 billion of foreign money to spend however he pleased. That’s nearly 2 percent of the American economy, or 13 percent of annual private domestic business investment. Trump could run an auction for countless private companies to get a piece of the action in exchange for special favors. He could purchase entire companies, making them the property of American taxpayers. However he chose to allocate the fund, Trump would enormously expand the federal government’s ownership and oversight of the private sector.

We should call that potential outcome what it is: socialism. If Trump were to get his way on this so-called investment fund, he would collectivize a large portion of America’s means of production. The president would control the flow of capital, the allocation of resources. Profits — and presumably losses, too — would be socialized.

Besides being antithetical to conservative economic principles, this scheme is also a blatant end run around the Constitution. Trump has extracted a commitment from Japan to hand him a boatload of money by imposing tariffs on Japanese imports and threatening to raise them higher. He is attempting to tax and spend hundreds of billions of dollars without a whiff of approval from Congress.

Like I said, chances are this Japanese investment fund never actually happens. But the mere fact that Trump wants to have such a fund at his disposal is confirmation that the president sees no limits on his powers or abilities to personally mold the largest and most complex economy in world history.