After more than a year of what has largely been a phoney war over trade, the Trump administration has got down to business. An announcement of global tariffs against steel and aluminium exports, ostensibly on national security grounds, was followed by threats of action against China for violations of intellectual property rights. For the other big economies — most obviously China and the EU, but also key trading countries and allies such as South Korea — this has set a high-stakes exercise in economic diplomacy. When dealing with an administration run by someone as mercurial as US President Donald Trump, the temptation is to give him what he wants, or at least something he can sell as a victory, in return for relief from the tariffs, and hope he moves on. There is much to be said for such a tactical approach. But making permanent concessions for temporary respite is not only a dangerous route to go down; a managerial short-term view of the situation, in fact, makes it more likely to...

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