Trade tensions aren't going away. Investors, beware

London(CNN Business) Happy Sunday. A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here.

As the fights between the United States and its trading partners continue to escalate, will the global economy be able to handle it?

It's a question that's likely to dog investors this week, with flare-ups in multiple trade battles serving as a reminder of ongoing volatility. At a time when global economic growth is slowing, such uncertainty is a big risk to markets.

Setting the scene: On Friday, China unveiled a new round of retaliatory tariffs on US goods worth $75 billion, many of which kick in on September 1. The Trump administration is set to enact a fresh batch of tariffs on Chinese goods that same day.

After Beijing's announcement, Trump said he would raise tariffs on $250 billion in Chinese exports to 30% from 25% in October, and that the tariffs arriving next week will now be at the 15% level, up from 10%. He also tweeted that he "hereby ordered" US companies that do business in China to "immediately start looking for an alternative."

The read, from risk consultancy Eurasia Group: "Trump's after-hours tariff announcement is significant but was somewhat more restrained than what the president suggested during a storm of tweets on Friday morning. Nonetheless, we are concerned that it leaves the two sides headed for further escalation."

Meanwhile, Trump, who sat down for lunch with Emmanuel Macron at a tense G7 summit in Biarritz, France, indicated he would confront the French president about a digital tax that would hit US tech companies like Google and Amazon. Trump has warned he could tax French wine in return.

Investor insight: The Dow fell more than 600 points on Friday. Stocks could face additional declines on Monday.

Much depends on the extent to which Trump holds his position. He appeared to falter slightly on Sunday, claiming that he "has second thoughts about everything." The White House then jumped in to say Trump meant he hadn't gone far enough.

Remember: Because it's late August, trading occurs at lower volumes than usual, which can heighten the impression of wild swings.

"The impact of a few sellers may be magnified," said Putri Pascualy, managing director at Paamco Prisma, an investment firm.

What discount stores can tell us about the economy

Dollar stores and discount chains Ollie's Bargain Outlet and Five Below report earnings this week. Here's why you should pay attention, from my CNN Business colleague Nathaniel Meyersohn in New York:

"These results will give investors a window into the health of American consumers, particularly lower-income shoppers. Discounters Walmart and Target recently reported strong earnings, taking market share from department stores and other struggling retailers." Will dollar stores display that same resilience?

Context: Healthy consumer spending has been propping up the American economy, helping to offset the impact of weakening sectors like manufacturing. Should retail sales falter, more panic about a potential economic downturn could ensue.

More from Nathaniel: "Dollar stores have swept across the United States in the past decade. Dollar General, the largest dollar store chain in the country, is opening up around 1,000 stores a year, even as many retailers close or fall into bankruptcy."

Weekend read: Dollar stores are everywhere. That's a problem for poor Americans

Up next

Monday: US durable orders; Germany's Ifo Business Climate Index

Tuesday: US consumer confidence

Wednesday: Germany consumer confidence; Tiffany & Co. earnings

Thursday: Japan consumer confidence; Eurozone business confidence; Abercrombie & Fitch, Best Buy, Dollar General and Dollar Tree earnings

Friday: US personal income and spending; Eurozone inflation; Campbell Soup earnings