Ed Davey's calls for "retaliation" are nearly as deranged as Trump's tariffs.

The US administration's tariff policies announced this week are probably the worst example of economic self-harm inflicted by any government on its own country's economy, never mind the rest of the world, in living memory.

Those of my American friends who supported  Trump told me that one of their main reasons for doing so was that they were unhappy about high inflation under Biden.

One of the most immediate impacts of imposing or increasing tariffs on your imports is to put prices up. The people who voted for Trump in the belief that he would cut inflation are not going to be delighted that far from cutting inflation his administration is directly causing prices to rise, and nor should they be.

I will have some more to say in the coming week about this, but the US administration has been acting like a Laurel and Hardy figure, swinging a sledgehammer around and accidentally hitting people - hitting Americans, the very people the policy is supposed to help.

Putting taxes on imports certainly hurts your foreign suppliers: but it also crucifies those of your own businesses who have integrated supply chains or use inputs they can only get from abroad. Many global American companies have spent decades building worldwide supply chains designed to enable them to offer their customers the best possible deal - and the US administration is taking a wrecking ball to their business models.

But if you listen to what British business says we should do in response, which is the one thing none of them are calling for?

Virtually no UK business has called for retaliation. They want Britain to negotiate, not retaliate. 

If the Trump administration is acting like someone swinging a sledgehammer around, hitting foreigners once and Americans twice, that what is retaliation?

Retaliation would be like picking up our own sledgehammer, swinging it around with equally deranged abandon and hitting Americans once and British businesses and consumers twice!

The Lib/Dem leader, Ed Davey, has been calling on the UK government to retaliate with tariffs on US goods. This is simplistic nonsense and he knows it - and irresponsible calls for s bad policy in search of a cheap headline.

Just as the Trump administration tariffs have put up prices for American consumers and clobbered US businesses with worldwide supply chains, in the same way retaliatory tariffs from Britain would put up prices for British consumers and clobber British companies which depend on components, raw materials, or any other resources most easily obtained from the USA.

Better, as Kemi Badenoch says, to dust off the trade deal which the previous Conservative government was negotiating with the first Trump administration until Biden cancelled the trade talks. Maybe we can cut a deal: maybe we can't. But at least we won't be making things worse and helping to plunge the world into a trade war.