During his first 16 months in office, President Donald Trump made all the right moves in leading the US economy and stock market to record heights: tax cuts, regulatory relief and pro-business rhetoric. Wages are inching upwards and people are returning to work. Yet, the potential for a full-blown trade war risks undoing much of that great work and punishing the very voters who elected him. The administration needs to change tactics now or risk jeopardising the midterms.

Mr Trump’s diagnosis of the economic big picture is correct: global trade imbalances have helped hollow out the middle class and create record income inequality. Dynamics left over from the years after the second world war are partly to blame, but the real catalyst for the decline of American industry was China joining the World Trade Organization in 2001.

Since then, the Chinese have consistently broken the rules by devaluing their currency, stealing intellectual property, failing to maintain adequate labour standards, illegally subsidising some industries and dumping products on the open market to drive out competition. Despite now being the world’s second-largest economy, China is still labelled a developing economy by the WTO, allowing it higher trade barriers than developed countries.