Donald Trump’s trade war with China is escalating, and fast. To briefly recap this week’s plot developments:

On Monday, the White House announced that it would place tariffs on an additional $200 billion worth of Chinese imports, on top of the $50 billion it has already hit.

Incensed, officials in Beijing to vowed to retaliate with tariffs of their own and hinted that they might cancel a planned round of trade negotiations.

Our president then warned that if the Chinese retaliated, he’d hit another $267 billion of the country’s goods with tariffs. “We don’t want to do it, but we’ll probably have no choice,” Trump said, a bit unconvincingly (he clearly wants to do it).

And to think, it’s only Wednesday.

China sells just over $500 billion worth of wares to the U.S.—meaning that if Trump goes through with his latest threat, he’ll have placed tariffs on essentially all of the country’s American-bound exports. This accelerating slap fight has left commentators in both countries afraid that we’re “in the opening stages of a new economic Cold War,” as the New York Times put it. Alibaba founder Jack Ma, China’s wealthiest man, said this week that he thinks the conflict could go on for 20 years. “This thing will last long. If you want a short-term solution, there is no solution.” But the reaction from investors has been fairly muted. Stock markets in both countries are up over the past few days, suggesting that global capital isn’t getting overly worked up over the dispute, even if it’s putting commerce between the world’s two economic superpowers at some long-term risk.

And that makes some sense. The trade dispute between the U.S. and China is at a perilous point politically, and if things go further south, it could start to make a significant difference economically. But the moves that both countries have made so far will likely be of limited consequences to consumers and most businesses.

Trade is complicated, but it helps to boil this battle down to some basic numbers. The White House is set to put a 10 percent tariff on a wide assortment of Chinese goods. But because China’s currency has lost about 9 percent of its value against the dollar in the last several months, prices of Chinese imports should stay within a fairly normal range by the standards of recent years. At today’s exchange rate, importing a 100 yuan widget from China would cost an American business just over $16, including Trump’s new tariffs. It would have only cost it slightly less as of April, and it would have cost it slightly more from the end of 2012 through mid-2016.

In other words, even with Trump’s tariff, buying Chinese merchandise shouldn’t cost American companies much more than they’re used to—especially if their suppliers decide to eat some of the tariff’s cost to avoid losing business. It’s unlikely that many companies will start moving their factories or toying with their supply chains under those circumstances, so disruptions to global trade patterns should be pretty limited. It also suggests that, despite all the dire warnings about how how Christmas gifts are going to be more expensive at Walmart this holiday season, consumers probably won’t feel much of a pinch. Economists at TD Securities, for instance, are projecting that Trump’s tariffs are only going to add a very mild one-tenth of a percentage point to inflation over the coming year.

Again, I’m simplifying here. Some products will probably be more affected than others—the price of washing machines indeed surged this year after Trump targeted Chinese-made models with tariffs, and we might see some similar examples in the coming months. American companies that sell into China will probably be hurt by Beijing’s tariffs, too unless Trump bails them out as he did soybean farmers. But in the end, Trump’s 10 percent levy is probably not going to make a radical difference in global trade.

The problem is that the rate could soon go a lot higher than 10 percent. The White House says it plans to raise the tariffs to 25 percent on New Year’s Day 2019. At that point, the 100 yuan Chinese widget we’ve been talking about would suddenly cost north of $18, well outside the historical norm. If tariffs leap that high, Trump will likely be applying them to more or less everything that China sells to the U.S.

At that point, the big question will be whether China is willing to devalue its currency enough to neutralize the higher tariff. That seems somewhat unlikely: The Chinese care about their exports, but they’re also wary about letting the yuan fall too far. Chinese companies carry a lot of foreign-denominated debt, which gets harder to pay off when the redback slides. And Communist Party officials are worried that a quickly plunging currency could bring back the sort of financial instability that spooked the world back in 2015 (some readers may recall the day that the country’s stock exchange had to close after just 29 minutes of trading). For those reasons and more, government officials in China have been very, very insistent in public that they are not planning some sort of strategic devaluation to strike back at Trump. “One-way depreciation of the yuan brings more harm than benefits for China,” Premier Li Keqiang said this week. “China will never go down the road of relying on yuan depreciation to stimulate exports.” But it’s always possible the government will ultimately be more flexible on the issue than its rhetoric suggests.

If the Chinese won’t let their currency fall in the face of a 25 percent tariff, the levy could begin to have some much more serious economic consequences. It will be far harder to shield consumers from price increases. And it’s likely that American companies will at least start thinking about finding suppliers in countries that Donald Trump isn’t waging a trade war against, since Washington and Beijing will be locked in a standoff.

Can we avoid getting to that point? As of now, the prognosis doesn’t exactly look great. Trump fundamentally believes that the U.S. will ultimately win any trade war against China because we import more from them than they do from us, which in his mind means they have more to lose from a drawn-out conflict. There are also anti-China hardliners within the administration, such as trade adviser Peter Navarro, who would probably like to push manufacturing out of the People’s Republic, even if it means U.S. consumers pay the price for a while. Meanwhile, Trump’s new tariffs seem to be driving the Chinese away from the negotiating table and could make them less apt to offer concessions on issues like tech transfer and intellectual property protection that are supposedly animating this whole dispute. The country’s leadership does not want to look weak in the face of Trump’s threats; one senior official said the country would not negotiate “with a gun pointed to its head.”

Then again, officials in Europe said much the same thing about Trump, right up until the point where they sat down and did some negotiating to ease their own trade disputes with the administration. The situation with China is already more serious and seemingly intractable that than the White House’s confrontations with our other trade partners. But we’re not at the point of catastrophe yet.