China, the world's second-largest economy, has some markets levers it can pull to escalate the battle. : China has a powerful financial-market arsenal for its trade tussle with America, including a hoard of Treasuries and its currency. But using those weapons is not without cost. Beijing has vowed to retaliate should U.S. President Donald Trump follow through with his threat to raise tariffs Friday on $200 billion of Chinese imports to 25% from 10% percent.