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

China's stocks and currency came under pressure as markets returning from a week-long break were greeted by a new trade dispute with the United States and ructions in the global artificial intelligence sector.

China’s tariff increases and other countermeasures were mostly symbolic and apparently designed to project strength while leaving the door open to talks.

Oil extended declines after China imposed levies on some US commodities, with West Texas Intermediate falling to around $72 per barrel and the global benchmark Brent hovering near $75. The yuan traded offshore extended losses with regional peers, while gold was little changed

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.

Beijing has made its decision. After days of warning of counter measures and urging Washington to enter negotiations and "meet China halfway", it has decided to hit back – or at least threaten to retaliate with its own tariffs.

China put export controls on tungsten and other niche metals used in the electronics, aviation and defense industries as it retaliated in a targeted way to US tariffs.