Donald Trump vows to challenge China’s trade abuses, but then how to explain his extraordinary intervention Sunday to rescue the Chinese telecom firm ZTE? The answer lies in the arbitrary and transactional nature of Mr. Trump’s trade policy, which has economic and political costs.

Last month the Trump Administration barred U.S. companies from selling to ZTE for seven years. But on Sunday Mr. Trump tweeted that “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back...