As trade tensions escalate, market watchers remain on edge.

"What we do know now is President Trump is dead serious about protectionism and tariffs," Michael LaBella, equity strategist at QS Investors, told CNBC. "This is not going to be a political sideshow."

On Tuesday, President Donald Trump's administration released a list of more tariffs — this time a 10 percent tariff on as much as $200 billion worth of Chinese goods. The latest round of levies faces a review process, with hearings taking place in August.

The announcement came just days after the U.S. imposed on China. Beijing retaliated with tariffs of its own.

"Bringing in an additional $200 billion in potential tariffs can quickly escalate to over a trillion dollars of trade-related tariffs that hit ... China, the U.S. and European Union," LaBella said Wednesday on "Power Lunch." "This is a major issue that the market, up until today, has been completely neglecting."

All three major indices fell during Wednesday's trading session, ending a four-day winning streak for the Dow.