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 more President Donald Trump threatens tariffs on the US’s trading partners, the more the worry of another inflation wave troubles global economists.

European Central Bank interest rates have room to fall further as inflation moderates, ECB board member Piero Cipollone said, warning that the U.S. administration's trade war with China could have a detrimental impact on the 20-member euro zone.

Asian equities were mixed overnight as the Philippines, Taiwan, and South Korea outperformed, Thailand underperformed, and Pakistan was closed for Kashmir Solidarity Day.

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

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.