A further escalation of the trade war with China will significantly hurt Fossil’s financial results, according to Wells Fargo Securities.

On Tuesday the Trump administration announced a list of tariffs on $200 billion in Chinese goods, making good on the president’s recent threats to broaden a trade war with Beijing.

The firm reiterated its underperform rating for Fossil shares, citing its manufacturing exposure to China.

Fossil has “the biggest risk in our universe. When looking at the names that could see the most impact from the recently announced import tariffs,” analyst Ike Boruchow said in a note to clients Thursday. “We view FOSL as having more meaningful risk, as we believe the majority of their production still takes place in China.”

The stock dropped 5 percent after the report.

Boruchow has a $12 price target for Fossil shares, representing 55 percent downside to Wednesday’s close.

The analyst noted 90 percent of Fossil’s cost of goods sold are sourced from China, according to company filings. He estimates if the proposed tariffs are implemented the company’s earnings before interest and taxes would decline by roughly $45 million or a negative impact of 25 cents in earnings per share.

Fossil did not immediately respond to a request for comment.