Donald Trump’s announcement of tariffs on $60bn worth of Chinese imports has raised the prospect of a trade war that threatens to engulf the global economy.

The raft of trade sanctions will likely to trigger retaliation: even before the US president’s announcement, a spokesperson for China’s foreign ministry said that Beijing would “take all legal measures to protect our interest”.

Analysts believe that not only will US and Chinese businesses and consumers suffer from dampened demand and higher prices of goods, but other countries will experience collateral damage.

“US-China bilateral trade investment ties are integrated with global supply chains. So a US-China trade war is necessarily going to have an effect on companies and consumers in other countries,” said Scott Kennedy, an expert on Chinese economic policy at the Center for Strategic and International Studies in Washington.

China is a major market for US agricultural products, cars, machinery and other products. In 2016, China was the third largest market for US exports. Conversely, more than 41% of clothing and 72% of footwear sold in the US are made in China, according to the American Apparel & Footwear Association.

“No one will gain from these protectionist policies. By implementing tariffs, prices will rise across industries which will hurt both producers and consumers,” said Ashley Johnson, project manager for trade, economic and energy affairs at the National Bureau of Asian Research in Washington.

More significantly, analysts say, a trade war between the world’s two biggest economies threatens to erode the system of multilateral and bilateral trade rules that has governed global markets since the 1990s – promising a return to “a much more Hobbesian world of trade and investment,” according to Kennedy.

“A rules-based system gives a basic sense of order to international economic relations. If that is gone, then when the next global financial crisis hits we could see a return to global tit-for-tat protectionism, a pattern of the 1930s that we should not wish to repeat,” said Gregory Shaffer, a professor at the University of California’s Irvine School of Law who has researched Chinese trade policy.

Beyond trade, the dispute signals a shift in US-China ties where economic and political engagement is no longer seen as a way to encourage reforms and liberalisation in China – part of the rationale behind US detente with China in the 1970s.

“The strategy has now changed. The US doesn’t care about whether there will be meaningful change within China,” said Henry Gao, an associate professor at Singapore Management University, who also researches Chinese trade policy.

The tariffs could encourage domestic Chinese sentiment to turn against the US. The announcement comes after the passage of a law allowing top US officials to visit Taiwan, a measure that China strongly opposes. Beijing views the self-ruled island as a “rogue province” that belongs to China.

An editorial in the state-owned Global Times warned the US against stoking Chinese patriotism, which could result in a mass boycott of US goods.

It read: “At that point, it’s not the Chinese government fighting back, but Chinese citizens. It will become a people’s war. Try us.”