Having spent a long time hoping that it was all bluster, the world’s investors, companies and policymakers have been forced to admit that a trade war is under way. How far it escalates remains unclear, but initial responses do not suggest an easy way of defusing the conflict.

The companies in the line of fire will certainly be affected. Shares in German carmakers — the auto sector is the next industry in Donald Trump’s sights — fell in unison this week after Daimler was the first major vehicles company to issue a profit warning because of tariffs. The US president’s threats against EU car exports are still in their early stages, but Daimler suffered because its US operations, which sell into China, will be hit by the retaliatory duties Beijing is imposing on American cars.

No country wins in a trade war, whatever Mr Trump thinks. The bizarre comments by his commerce secretary, Wilbur Ross, that the rise in US steel prices following the imposition of tariffs reflected “profiteering” by speculators merely underlined the economic illiteracy involved. If you restrict the supply of something, its price tends to go up. That is how tariffs are supposed to work.