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By Garfield Reynolds, markets commentators and analyst for Bloomberg.

Rising volatility is the real problem for markets, not trade wars.

Equity markets have rallied back to seemingly erase all of the concerns that were sparked when Donald Trump announced tariffs on aluminum and steel. Investors do need to be wary of the rise of protectionism, but the latest moves won’t have any lasting real-world impact.

More than a year into his presidency, Trump has had a much smaller influence on trade issues than many would have expected from his campaign rhetoric. He pulled out of TPP, but Clinton would have done so too, and the relationship with China has been surprisingly calm.

Two of America’s main steel suppliers have already won exemptions, as has Australia, while both of the targeted metals cast very small shadows in the U.S.

The genuine danger is that the EU’s response, or Trump’s subsequent reaction, is to implement more severe sanctions that would cause substantial damage. But that scenario is difficult to price and will only materialize over time.

As a result, traders are correct to ignore day-to-day trade ructions as this is an area that only has long-term economic impacts. Global trade is the ultimate collection of supertankers so it takes a lot of effort and even more time to turn it around.

The more valid area of concern is volatility, which has flirted with a game-changing shift to an environment where price swings are constantly elevated.

For now, the VIX is back down to where single-digit readings again look possible, but price swings across other assets remain at levels that offer more cause for concern; the Move index for Treasuries in particular remains quite high.

The sting in the tail is that trade has added to other recent volatility drivers -- such as monetary policy shifts, politics in both Europe and the U.S., and inflation concerns -- so that it’s much harder to avoid fresh spikes in implied vol. But, unless stock, bond and FX volatility all clearly rise again, equity investors can relax at least enough for greed to rival fear in their decision-making processes.