On Friday, June 18th, President Donald Trump again raised the specter of a trade war between the world's two largest economies by announcing that he would hit China with $50 billion of 25% of their imports. The initial tariff, scheduled to be implemented on July 6th, will apply to $34 billion of Chinese goods, with an additional $16 billion in new products to follow. The list of the 1,100 affected Chinese products includes cars, robotics, aerospace, and farm products.

The stated aim of the tariff is to protect US intellectual property and technology, which Trump has repeatedly claimed China has "unfair[ly] transfer[ed]." Trump believes that the tariffs will also help protect American jobs and help bring down the the US trade deficit with China from $376 billion to $200 billion.

But it is also likely to increase prices for many American consumers who are accustomed to cheap prices on goods imported from China. It will also impact several American industries that currently rely heavily on Chinese products. Experts estimate that Trump's tariffs might actually cost about 45,000 American jobs.

Whether or not an all-out trade war will break out depends on a variety of factors, including how far Trump is willing to go to reach his goals and how China reacts. Trump has threatened to add a further $100 billion in tariffs against China, and it seems likely that he could make good on that threat: US officials are already drafting a list of products that would reach that amount, and the White House says it's also crafting proposals to restrict Chinese investment to be ready for release by June 30.

Here are a few ways the tariff dispute could play out.

First, it's possible that both the US and China will back down. After all, it was only a few weeks ago that Treasury Secretary Steven Mnuchin announced that Trump was "putting the trade war on hold," and wouldn't impose tariffs just yet. But because Trump's administration seems focused on fundamentally changing the structure of the US-China trade relationship, particularly on technology, this option seems unlikely.

Second, China might accede to the US by addressing technology issues and allowing more American products and services into its markets. China has some incentive to do so: President Xi Jinping's administration is trying to manage the Chinese economy, slowing it down to focus on consumer spending, and a trade war could interfere Xi's carefully crafted plans. China exports more goods to the US ($505 billion) than the US exports to China ($130 billion), meaning that Trump could continue to heap on more tariffs, while China's response would be limited by the fact that there simply aren't "enough US goods to tariff," as Alex Wolf, an emerging markets economist at fund manager Aberdeen Standard Investments, phrased it (though some believe China could sidestep this problem by redirecting these goods to burgeoning markets in Southeast Asia).

Third, the US might back down. This might seem unlikely simply because of Trump's pugnacious personality and his pride in ability to "make a deal." But there are real disadvantages to tariffs that might make Trump reconsider. Trump has enjoyed the rising stock market and a robust US economy, but tariffs have the potential to erase this. The list of American goods China plans to tariff includes products from industries in America's heartland, which might negatively impact a wide swath of Trump's voter base. China could also hit back against the US in ways aside from imposing tariffs, for example - by restricting American companies in China or restricting tourism.

Fourth, the trade spats escalate into a trade war. Neither country wants to appear weak. Trump catered to voters suspicious of globalization, who support a much more protectionist stance. China wants to become a global leader in technology. The severity and impacts of this trade war will depend on a variety of factors, but in the worst case scenario, it could heighten global tensions, reduce consumer confidence, hurt business, and ultimately stunt growth for both economies.