SOME investors have been concerned this year about the potentially damaging impact of tighter monetary policies in a relatively buoyant global economy.

In particular, they fear that central banks could feel compelled to get ahead of economic developments and act to slow growth.

Legitimate as these worries are, the spectre now haunting risk markets is the prospect of a trade war between the US and the rest of the world as President Trump lives up to his promises and acts, by decree, to put America first.

There was a time when Glasgow was one of the World’s major trading hubs.

Though those days may be long past, without them we wouldn’t be able today to enjoy the legacies of the likes of Sir William Burrell’s museum and collection.

Nor does that mean we shouldn’t be concerned about the trade war threatened by Trump as he tries to remedy the inequity he sees in past US trade treaties.

In a trade war there are no winners.

The International Monetary Fund has been quick to highlight that US trade tariffs threaten the economic prospects not just of those countries outside the US but also the US itself.

Trump should remember that after George W Bush hiked steel tariffs in 2002 and while they remained in place, the number of employed Americans fell and some 200,000 American jobs were lost for reasons directly attributable to those tariffs.

One of the problems in any conflict is it invariably takes on a life of its own and will evolve unexpectedly.

Further retaliation from those countries initially impacted is almost certain but this often broadens out the dispute by targeting sectors in which the US is dominant or by deliberately favouring those nations with which America competes.

Another unexpected consequence could be a rise in foreign ownership of US production as international players buy up capacity in the US. This happened in the 1980s after quotas were placed on Japanese car imports.

Protectionism can also sustain inefficiencies and hinder development. In a deal described by a US official as “visionary and innovative”, the US and South Korea last week swiftly concluded the renegotiation of their bilateral trade arrangements, with Korea agreeing to soften its safety and emission standards on 50,000 US-made cars each year.

Thankfully it currently looks as though a full-scale trade war is unlikely. Trump’s operating model is to shout loud and then row back on implementation.

This is already happening quietly with exemptions around steel and aluminium tariffs, where North American Free Trade Agreement members are exempt, and where there is scope for a delay in implementation with the EU. Given that Korea currently only imports 11,000 US cars per year, the inference is that Trump can be cheaply bought off.

The situation may be tougher with China and specifically in dealing with US intellectual property.

It is to be hoped the past pattern of Trump’s behaviour wins out. If so, then equity investors may be near their peak in trade war angst.

This presumes, however, that China and others will continue to be measured in how they respond to Trump’s opening salvos.

A darker prognosis would see the current spat as the opening gambit of a long drawn out tussle between the US and China for global dominance.

Added to this, Trump’s reopening of Taiwan to US official trips directly challenges Beijing’s One-China policy.

Finally, it is worth remembering that none of this would be happening if the global recovery from the dark days of 2008/09 had been enjoyed by more people and widening inequality avoided.

Trump’s policy platform plays to a sizeable portion of the US population who feel that, for them, the Great Financial Crisis of 2007/08 has yet to end.

Stephen Jones is chief investment officer at Kames Capital.