Stock markets stabilized Friday after President Trump called the latest round of U.S.-China trade talks “constructive.” That seems to be the case to the extent that the two economic giants agreed to keep talking, not that they are closer to a deal. Prepare for some collateral economic damage as the two sides ratchet up their dueling tariffs.

President Trump followed through Friday on his threat to impose tariffs of 25% on $200 billion of Chinese products. China has said it will respond in some fashion, probably with more tariffs on American exports, and the magnitude will be a signal of how far apart the parties are. The danger is that Mr. Trump feels obliged to respond again and impose tariffs on $325 billion more Chinese exports to the U.S., and back and forth we go.

This is a political trade risk the economy hasn’t faced since the 1930s, and no one knows where it might end. Markets have been discounting a deal for months, assuming that both sides want one in their own economic interests. That’s right on the merits, and negotiating game theory assumes setbacks and bluffs, but sometimes political players miscalculate.

Meantime, there will be many economic losers. The tariffs are border taxes that do arbitrary harm, often on the innocent. Some of our friends say the Chinese are bearing the main cost of the tariffs because the decline in value of Chinese yuan is offsetting most of the tariff impact. True enough as far as that goes, but it doesn’t account for the impact of China’s retaliation.

This is hitting American farmers especially hard as one of their largest markets has shrunk. No amount of government subsidies can make up for lost market share. And as President Trump knows, those farmers hail from states he won in 2016 and needs again in 2020.