Fund managers are downplaying Donald Trump’s tariff threats, saying the risk of stoking inflation will stop the president from rushing out destructive trade policies that could threaten global growth.

In his first week, Mr Trump floated the prospect of a 10 per cent tariff levied on Chinese imports, a 25 per cent levy on goods from Canada and Mexico – America’s largest trading partners – from February 1, and has vowed to slug the European Union and Russia.