This week, China showed new willingness to weaponize its currency after President Donald Trump threatened tariffs. American family finances could be collateral damage.

The exchange rate between the Chinese yuan or renminbi and the U.S. dollar breached a symbolically important marker Monday, when the number of yuan a dollar could buy rose above seven for the first time in years. Although it retreated below that level midweek, it rose again Thursday and remained just over seven Friday.

Eventually, this will boomerang back to the finances of the average American family, Lindsey Piegza, chief economist at Stifel Fixed Income, said.

“It’s going to lead to higher production costs for U.S. businesses. That’s going to eat into companies’ bottom lines, which means they're not going to be able to hire as many employees or pay those higher wages,” she said.

Labor market economists have already expressed concern that wage growth may have peaked for this economic cycle, with rates that have barely inched above 3 percent on an annualized basis — below the 3.5 to 4 percent many characterize as representative of a healthy job market.

Consumer spending has so far filled in the gap left when companies pulled back on investment, Gross domestic product data shows, but slower wage growth could derail this momentum.

This would amount to a one-two punch to the average family's budget if it is coupled with the rising prices analysts say this new round of tariffs will almost certainly bring.

“The impact on U.S. consumers is the same as any other government-imposed sales tax,” Tom Elliott, international investment strategist at the deVere Group, said. “Consumer prices go up, unless the importer or retailer is willing to absorb them — in which case, corporate profits fall.”

With a volatile equities market already on edge, falling profits could cause stocks to tumble, and the ripple effect on average Americans' investments — namely, 401(k)s and other retirement savings vehicles — would erode confidence as well as savings.

The market response to the yuan breaking the seven-per-dollar mark reflects trepidation over how a more disruptive chain of events might unfold, said Charlie Ripley, senior investment strategist at Allianz Investment Management.

“Clearly that’s been somewhat of a psychological level, but if it were directionally to continue to weaken, I think that would be a sign of concern,” he said. “That was really interpreted as, is it escalating even further? Are we moving towards a currency war?”