Trump’s trade war is getting worse not better. It demands a clever – not rash – response

The best course of action in responding to the whims of the US president is not to act calmly

The trade war, far from moving towards a truce, seems to be opening up on new fronts.

Donald Trump has just imposed steel tariffs on Brazil and Argentina, and has proposed tariffs of up to 100 per cent on a variety of French goods including cheese, champagne and handbags in retaliation for a tax on technology companies. The tax is a 3 per cent levy on revenues earned by all companies that provide digital services in France, but in practice it catches mainly US firms, because they dominate the market.

Shares in French businesses producing luxury products duly fell at the news, but while some $2.4bn (£1.85bn) of French exports might be affected, the scale of the potential hit is small when set against the proposed levies on Chinese goods, which take effect on 15 December unless there is some agreement by then. The US president has threatened to impose a 15 per cent tariff on $160bn of Chinese goods.