PARIS—What to make of the Yellow Vests? For a third week in a row, they continue to dominate the news. Televised scenes of pitched street battles between protesters and police on Saturday raised alarm about an “insurrectional atmosphere” unseen in France since May 1968. Reports suggested that French President Emmanuel Macron might declare a state of emergency in response.

Instead, in his first sign of retreat since taking office in May 2017, Macron agreed yesterday to suspend the planned fuel tax hike that served as the catalyst for the popular mobilizations that have transfixed, if not exactly paralyzed, the country. ...