Stocks have been buoyed in recent weeks by the prospect of a light at the end of the trade-war tunnel, with investors anticipating an imminent “phase one” deal with China. That upward trajectory abruptly reversed on Tuesday, after President Donald Trump said there might be no resolution until after the 2020 election.

“In some ways, I like the idea of waiting until after the election for the China deal,” Trump told reporters from the NATO summit that begins today in London, adding, “I have no deadline.”

The benchmark Dow Jones index fell 400 points shortly after opening, its biggest drop in two months, in response to the news.

Economists’ top concern is a tranche of tariffs on $156 billion in Chinese imports, primarily consumer goods, that is set to take effect on Dec. 15. A trade deal was widely expected to suspend the implementation of those tariffs. Now, all bets are off.

“I think it has to go into effect, otherwise Trump loses his credibility,” said Mitchell Goldberg, president of ClientFirst Strategy. “I think investors are factoring in that it’s going to go into effect,” he said, predicting that the market could fall by up to 10 percent.

Goldberg remained optimistic, though, that a broader market rout was unlikely. “This is not going to be, in my opinion, a repeat of year-end, 2018,” he said, pointing out that concerns about inflation and higher interest rates that triggered a December selloff turned out to be unfounded. “I still think the market has a lot of wind at its back,” he said, listing corporate buybacks, low interest rates and solid consumer spending.

Some experts are less sanguine, saying investors have been viewing the trade war through rose-colored glasses. “Markets have been far too complacent in the whole treatment of this trade war,” said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics. “I think they’re also greatly underestimating the longer-run effects of this trade war,” he said.

Slapping a new round of tariffs on everything from coats to computers would send shock waves through the consumer economy and threaten to derail consumer spending, Kirkegaard said. “I certainly don’t think markets are pricing that in. I think the reaction to that will be significantly more negative than what we’ve seen in markets to date.”

“Nothing good will come out of it,” said Mark Zandi, chief economist at Moody’s Analytics.

Referring to the Trump’s statements on Tuesday, Zandi said, “If what he means is if he allows the tariff increases he’s threatening on Dec. 15 to go into effect, then I think we get a recession next year.”

On those grounds, some economists argue that the tariffs almost certainly will be suspended or delayed — the economic fallout would be too great to risk.

“I suspect even the China hawks in the White House don’t really want to impose the December tariffs. They were supposed to be a threat to win concessions from China. Actually implementing them would just put up prices for American families,” said Mark Williams, chief Asia economist at Capital Economics.

In addition to pinching household budgets and reducing consumer spending power, more tariffs could hurt American job growth, as well. Zandi estimated that the trade war thus far has probably cost the labor market around 40,000 jobs each month. “It’s obvious in manufacturing,” he said, adding that more tariffs could accelerate job losses.

On Monday, the president blamed the Federal Reserve for the contraction in manufacturing, writing in a pair of tweets, “Manufacturers are being held back by the strong Dollar, which is being propped up by the ridiculous policies of the Federal Reserve… The Fed should lower rates (there is almost no inflation) and loosen, making us competitive with other nations, and manufacturing will SOAR!”

But economists say trade policy, not monetary policy, is the hurdle facing American manufacturing, which dropped for the fourth month in a row, according to figures released Monday from the Institute for Supply Management. “Global trade remains the most significant cross-industry issue,” Timothy Fiore, chair of the ISM’s Manufacturing Business Survey Committee, said in a statement.

And unlike last year, there are fewer mitigating actions the Federal Reserve could take if the market plummets.

“This time I think it’s very unlikely that the Fed is going to somehow surprise the markets by easing more,” Kirkegaard said. “The Fed has pretty clearly signaled that they’re on hold now. That means there is no parachute if there is a significant contraction.”