A funny thing happened this week that you wouldn’t think possible from reading the common narrative of President Trump as a Frankenstein’s monster unchained to do whatever he wants: He backed down from his demands to own Greenland. And he did so after financial markets, European allies and the U.S. Congress raised objections. The “authoritarian” Trump narrative was wrong again. This isn’t to dismiss Mr. Trump’s often wild demands and threats. They have consequences in lost trust among allies and doubts about American reliability. These costs are hard to quantify, but they are real and may show up in a...