President Donald Trump's administration may be poised to announce what could become a major effort to strike out at China for its trade practices, but the stock market rally this year hasn't even hiccuped.

The announcement was originally set for Friday, although sources said that's now been postponed. But if that does come down the pipeline, it may use part of the 1974 Trade Act, Section 301, which allows the U.S. Trade Representative and the president wide latitude in imposing punitive measures. Those may including tariffs and import quotas if an investigation finds violations of trade rules.

Deborah Elms, executive director of the Asian Trade Centre, told CNBC that the potential damage could be "huge."

She described Section 301 as a "powerful tool," retired in the mid-1990s because it "irritated" the international trade community as it was viewed as both unilateral and unfair.

"If we get to the end of [the Section 301] process 12 months from now, there can be a lot of damage caused," she said, adding there was a second risk that during the process, China would make business difficult for U.S. companies there.

Elms also pointed to a third risk: Using Section 301 could upset the global community, which over the past six months has already begun to turn away from policies viewed as favorable to or started by the U.S.

But while global trade is facing major upheaval, the S&P 500 index, despite its constituents getting nearly 50 percent of their overall sales from foreign markets, closed just shy of its record closing high on Wednesday.

The also closed over the 22,000 level for the first time on Wednesday.

Mark Matthews, head of research for Asia at Bank Julius Baer, told CNBC that markets just don't seem particularly interested in politics.