At last, we know enough about US President Donald Trump’s opening move on tariffs to start thinking about what it all means. By imposing tariffs on America’s imports, he’s shot his economy in the foot, but the rest of the world decides how bad it’s likely to be by what we do in response.

But first, don’t be too impressed by the big fall in share prices. The sharemarket isn’t the economy. You could regard its movements as a predictor of whether the economy will keep growing strongly or fall in a heap, but it’s an unreliable guide, having called a lot more recessions than have actually happened.

By imposing tariffs on America’s imports, Donald Trump has shot his economy in the foot.Credit: Getty Images

Compulsory superannuation has given every employee a stake in the sharemarket – including overseas sharemarkets – but although share prices go down as well as up, over the years, they tend to rise. So only if you’re just a year or two away from retirement – and will be needing to sell shares for money to live on – should you care about the latest drop.

Back on tariffs, everyone benefits from being able to trade with other people, whether they live inside or outside our country. The lower the barriers to trade, the better off we and our trading partners become.

So, while Trump’s tariffs – import duties – will hurt the countries it imports from to an extent, it’s the American businesses and consumers now having to pay more for their foreign purchases that will be hit hardest.

What he’s done will increase US prices and discourage growth in his........

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