If Donald Trump is playing a game with world trade, then our best option is to humour him and play along

The dangerous game now being played out is one that takes serious risks with the living standards of the entire world

As a kind of irascible orange version of the Incredible Hulk, President Trump is not a man we like when he’s angry (Getty)

Cecilia Malmstrom, the European Union trade commissioner, says that President Trump is playing a “dangerous game” by imposing tariffs on steel and aluminium imports. She is exactly right.

The danger she refers to is indeed extreme: a trade war that would make every nation involved poorer and, in the end, should it spread, make the poorer nations least able to weather such a storm still poorer.

The last time Europe and America engaged in anything like the kind of hostilities now being threatened was between the first and second world wars, and it was an unhappy experience, with all manner of gruesome consequences. The language then was the same as now: “America First” and the delusion that one nation can reduce its trade with another without necessarily damaging that other country’s ability to buy goods and services from the other.

The downward cycle and damage that a trade war can produce is virtually limitless, if unfamiliar in the modern world.

Despite some spats in recent decades, the general trend towards multilateral liberalisation, free trade areas, customs unions and single or common markets since 1945 has been unprecedented and formidable. It has helped deliver growth in the world economy in the decades since equivalent to that enjoyed in the previous millennium. We have too easily taken it for granted.

The European Union, for all its democratic deficits and rackets, is the outstanding monument to the creation of a single market and (of the most part) successful monetary and economic union across 28 states and 500 million people previously notable for their propensity to invade each other.

Globalisation, for all its discontents and flaws, has lifted billions out of poverty in China, India, East Asia, South America and Eastern and Central Europe as they rejoined the capitalist club and world economy from the 1980s onwards. They are richer now because they trade with the rest of the world as never before.

In the West, jobs have been lost in declining industries, but gained in new industries, while consumers have enjoyed an unparalleled rise in their standard of living. Some communities were too easily forgotten as they were “left behind”, in the fashionable phrase; yet the overall impact of the international trade revolution has been positive.

So the dangerous game now being played out is one that takes serious risks with the living standards of the entire world. The world economy derives much of its strength from trade, and the movement of labour across borders – something the new wave of populist politicians, especially on the right, dislike as much as free trade.

A game, though, is what we must hope Mr Trump is playing: another example of his erratic approach to diplomacy, rather than his last word. If this is his crude tactic to twist arms and get the best deal he can for America, that will have to be indulged. It is not so very different to the way he has played the North Korean issue, for example. Perhaps that is how he used to buy real estate around Manhattan.

In any case, if United States policy is geared towards getting China, the EU, Japan and the other countries to talk, then talk we should. As the least worst option, given Mr Trump’s unpredictability and vindictive nature, it is preferable to the EU slapping punitive imports taxes on Harley-Davidson motorbikes or bottle of Jack Daniel’s – symbolic measures that would make little economic impact but merely enrage the White House. As a kind of irascible orange version of the Incredible Hulk, President Trump is not a man we like when he’s angry.

The EU, then, should follow a careful and proportionate policy. A referral of the dispute to the World Trade Organisation is a given, and we shall see what use that is. The major trading powers in the EU – which means above all Germany – must take the lead in appeasing Mr Trump, to avoid still greater damage to the European economy. The EU should also coordinate its approach with Canada, Mexico, South Korea, Japan and China, all of whom are being victimised by Mr Trump’s trade tantrums.

It’s true that President Trump is not likely to take much notice of Ms Malmstrom, who is as close as it gets to being his antithesis: the anti-Trump. A Swedish liberal with a PhD in political science, she speaks six languages and has spent much of her career wandering around the Brussels bureaucracy. She’s not really The Donald’s “type” (though her earlier career as a psychiatric nurse might give her more of an insight into the mind of the curiously insecure 45th president).

But Mr Trump would, bullying and impulsive as he is, have to pay attention to the countries with whom America trades and who, together, make the economic world go round. He might also pay attention to his more sensible advisers, the stock markets and globally minded American business leaders. It is, admittedly, a slim hope, but if Mr Trump really is playing a game, then the rest of the world may as well humour him.

So it’s back to the negotiating table on trade. Fine. There are no better options, in truth. An all-out multinational trade wars would be far, far worse than playing games with The Donald.