The world's two biggest economies are on the brink of an economically destructive trade war. Here's what experts think could happen next.

The first punches have been thrown between the United States and China in what could amount to a short-lived trade dispute with limited economic fallout or the start of yet another lengthy and painful trade war reminiscent of President Donald Trump’s first term.

During his first term in 2018, Trump initiated a brutal two-year trade war with China over its massive US trade surplus, with tit-for-tat tariffs on hundreds of billions of dollars worth of goods upending global supply chains and damaging the world economy.

U.S. stock index futures were subdued on Tuesday as investors avoided risky assets after China struck back with retaliatory tariffs in response to new U.S. restrictions against Chinese goods. Minutes after U.

China hit the U.S. back with retaliatory tariffs across the board over President Trump’s enforcement of tariffs on Chinese goods that went into effect on Tuesday. China’s Ministry of Finance announced the countermeasures,