The trade conflict between the United States and China has been gradually but steadily hurting the world economy, the head of Japan’s biggest business lobby warned Monday.

“I’m truly feeling some of the impact” from the tariff battle between the world’s two largest economies, Keidanren Chairman Hiroaki Nakanishi said at his new year news conference.

Japanese firms also face downside risks to the domestic economy in 2019, most notably the planned consumption tax hike in October, which could slow household spending.

Prime Minister Shinzo Abe, who attended a meeting of business leaders earlier in the day, said the government will take sufficient measures to ease the impact of the tax increase and keep the economy on track. He also asked the executives to raise wages at their upcoming annual talks with labor unions.

At the news conference jointly held by Japan’s three major lobbies, Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, said, “We have no measures to reduce the impact on the economy,” referring to Britain’s planned departure from the European Union as well as the U.S.-China trade row.