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The effects of Donald Trump's mercurial political temperament have been felt in many domains. But nowhere, perhaps with the exception of the North Korean question, have those consequences been as potentially far-reaching as in trade policy.

As Martin Wolf points out in his latest column, US tariffs on China announced by Mr Trump could affect up to $800bn worth of imports. The Chinese have already begun to retaliate.

Where will the cycle of tariff retaliation end? Some economists predict that global trade might shrink by up to 70 per cent, although they forecast that the hit to output could be contained. This latter assumption, Martin suggests, might be optimistic. For one thing, it fails to account for the dynamism that would be lost as global competition is reduced.

James Ferguson Web

What can those on the receiving end of US tariffs do? They can retaliate — as Beijing is already doing. And they can strengthen co-operation with other countries. They could even call Mr Trump's bluff and take up his offer of tariff-free trade.

Sarah O'Connor argues that tight labour markets across the developed world are beginning to heal the scars left by the financial crisis.

Huong Le Thu warns that it will be harder than many — including US secretary of state Mike Pompeo — think for North Korea to emulate the development path followed by Vietnam.

Meg Russell says there are important lessons about the use of plebiscites in a democracy to be learned from the EU referendum in 2016.

David Allen Green argues that the politics of Brexit have finally caught up with legal reality.

What you’ve been saying

British stripe goes from top right to bottom left — Letter from Tony Parrack:

With so much comment on Gareth Southgate’s sartorial choice of waistcoat and tie, I feel it only proper to mention that in the beautifully painted caricature accompanying the enlightening Person in the news article about him (July 7) his tie stripe is shown going top left to bottom right as you face him — an American stripe format, the British stripe going from top right to bottom left. I am sure that his meticulous nature as mentioned in the article would not allow him to wear anything other than a tie striped in the British style — particularly if he is aware that his clothing choice is apparently kick-starting a broader trend?

Comment by Nac on We need a publicly funded rival to Facebook and Google:
I was wondering if there could actually be a market-based solution. What if people were paid to join and it was developed by a consortium of advertising companies? Instead of these companies paying Facebook, etc. they could run the platform and pay people for using the platform. This could be more transparent and efficient from all sides. You could also start the platform very cleanly, with no hate speech or fake news. I have yet to read anything that has convinced me we truly know the outcomes we are trying to achieve through regulating Facebook or even Google.

Southgate is proud to dress as an Englishman — Letter from Dr Austen O’Hare:

In his illustration for “ A coach to banish England’s demons” (Person in the news, July 7) Cummings portrays very well the bulldog spirit coursing through Gareth Southgate’s veins. His tie, however, has been grossly misrepresented as a US specimen, revealed in the direction of the pattern diagonal. As is evident from all the images in the press and on TV, Mr Southgate is very proud to dress as an Englishman with the correct style of neck apparel.

Today’s opinion

Tight labour markets are healing the scars of the financial crisis
Higher wages are not the only, nor the most important, consequence of full employment

 Peter Carrington, former UK foreign secretary, 1919-2018
Peer was renowned for Rhodesia settlement and Britain’s response to Falklands invasion

North Korea would find Vietnam’s road to modernisation hard going
Hanoi’s reintegration was the result of following the post-cold war order, not defying it

Argentina’s armchair economists fixate on the peso
Historic economic volatility has turned Argentines into veteran currency speculators

Instant Insight: Theresa May picks her new cabinet to shore up her position
The UK prime minister has replaced Brexiters with uncontroversial choices

Free Lunch: EU regulations are more protective than protectionist
It is a myth that the bloc’s rules largely serve to stop import competition

FT Alphaville: Universities of Britain: cosying up to crypto is a bad look 

FT Alphaville: Further reading 

Instant Insight: Trump takes another step to remake America
Nomination of Brett Kavanaugh is the safest conservative bet the president can find

The politics of Brexit have caught up with hard reality
Chequers and its aftermath show it is time to end plays to the domestic audience

Take more care with referendums — democracy depends on it
There are lessons to be learnt from the UK’s divisive 2016 vote on EU membership

FT View

The FT View: Erdogan tries to defy economic orthodoxy
Turkey’s strongman may find the markets are his biggest constraint

The FT View: A conservative future for the Supreme Court
Kavanaugh’s nomination has significance beyond US culture wars

The Big Read

The Big Read: Trump and Putin: inside the muddled American policy on Russia
US president’s stance may become clearer as he meets Russian leader and attends Nato summit

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