It has caused widespread fears that a trade war might go unchecked, but markets seem to hope that further escalation will be avoided.
The heightened risk of a transatlantic trade war, as a result of rising protectionism, is mainly US driven and it is up to President Trump to show his willingness to compromise and up to China to keep taking actions to address US grievances. It would be a collective policy failure if the multilateral trade system were to collapse.