When the United States declared China a currency manipulator on Monday, long-building trade tensions between the world’s two largest economies spread to the combustible realm of currencies — with potentially huge consequences for the global financial system should the escalation continue.

On Wednesday there was just such an escalation. Central banks in India, New Zealand and Thailand cut interest rates, aiming to protect their economies from the fallout of the trade and currency war. And bad numbers on industrial production in Germany heightened fears of a recession in Europe. Money flooded into safe assets, especially United States Treasury bonds.

But the wave of worry around the world has its roots in the increasingly fraught relationship between China and the United States.

Did China allow the value of the renminbi to fall against the dollar simply so it would better match the nation’s economic situation, as the country’s leaders and many international economists argue? Or was it, as President Trump contends, an effort to give Chinese exporters an unfair advantage in trade? If a factory in China makes furniture, for instance, a fall in the renminbi against the dollar gives it an advantage in selling to the United States.