"Don't worry about China, it will all be fine." This is U.S. President Donald Trump's latest message after his threat of imposing 100% tariffs on China on Friday sent markets into meltdown. In response to Trump's tariff threat, China has said it "does not want a trade war but is not afraid of one," vowing to take resolute countermeasures if the tariff hikes go ahead. What fueled these latest escalations by the U.S.? How to understand China's firm responses, which China calls passive or legitimate defense? How could things play out ahead of next month's APEC summit in South Korea?

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