Additional U.S. tariffs on Chinese imports and a continuation of the trade war with China could potentially trigger a global recession, cut American corporate profits by 6%, drive consumer price increases and result in the closure of approximately 12,000 brick-and-mortar retail stores, according to separate forecasts from leading financial analysts.

The negative scenarios envisioned in the reports from Goldman Sachs, Morgan Stanley and UBS Investment Bank put voice to one of the biggest tariff-fueled fears for promotional products executives – namely, that the import levies will hurt the American economy. Sales and profit performance in the promo products industry tend to trend in the direction of gross domestic product and the broader business world’s success – or failure.

The promo industry already has a lot on its plate because of tariffs. After President Donald Trump increased the tariff rate on $200 billion of Chinese imports from 10% to 25% on May 10, suppliers across the industry announced that price increases on affected items would be inevitable.

If you have anything to do with the #promotionalproducts industry, probably worth giving this a look: https://t.co/y9C9zpDqPQ #tariffs #tradewar https://t.co/y9C9zpDqPQ @VagnoniASI @ASI_MBell @ASI_AndyCohen @DannyRosin @geigergetsit @PKennedy_ASI

— Chris Ruvo (@ChrisR_ASI) May 15, 2019

What’s potentially even more troubling for promo and the American economy, however, is that Trump is considering implementing a 25% tariff rate on an additional approximately $300 billion in Chinese imports – a move that would apply the levy to nearly everything the U.S. imports from China. While administration officials have said the possible new tariffs are at least 30 to 45 days from being implemented, there’s a real chance that, if instituted, they would compel price increases on virtually every China-imported promo item.

And worryingly, that’s not the only potential unwelcomed fallout. Morgan Stanley sees a potential global recession in the cards, particularly if the new tariffs come into play.

“If talks stall, no deal is agreed upon and the U.S. imposes 25% tariffs on the remaining $300 billion of imports from China, we see the global economy heading towards recession,” Chetan Ahya, Morgan Stanley’s chief economist and global head of economics, said in a note to investors this week.

There are already headwinds. Since Trump issued the new tariff threat last week, the S&P 500 had fallen 3.4% through early this week. Similarly, the Dow Jones Industrial Average had plummeted by about 800 points.

Should a recession occur, the Federal Reserve would slash rates – possibly all the way down to zero by spring 2020, Morgan Stanley predicted.

Morgan Stanley: More tariffs on China could trigger a global recession https://t.co/K9kglbQE6D

— Yun Li (@YunLi626) May 20, 2019

Goldman Sachs’ report wasn’t much cheerier. The firm said that, should Trump impose the 25% tariff rate on $300 billion more in Chinese imports, than it could lower earnings estimates for U.S. companies by 6%. Goldman tempered the prediction somewhat, saying it was a worst-case scenario, but also noted that companies in aggregate could have to increase consumer prices 1% to account for tariffs – hardly good news for Americans on budgets. The likelihood of additional tariffs being implemented is about 30%, Goldman predicted.

Similarly, UBS Investment Bank said that the trade war could propel price rises on everything from clothing to toys, while potentially jeopardizing some $40 billion in retail sales. Also, the trade war and tariffs could prompt 12,000 retail stores in the U.S. to close.

“The market is not realizing how much brick and mortar retail is incrementally struggling and how new 25% tariffs could force widespread store closures,” a UBS analyst said in a report. “We think potential 25% tariffs on Chinese imports could accelerate pressure on these companies’ profit margins to the point where major store closures become a real possibility.”