Trade talks between the US and China have failed to bear fruit once again, and the trade war is intensifying even further.

US President Donald Trump vowed to expand tariffs onto a huge swath of consumer goods last week, and the Chinese response was to devalue the Yuan. The Trump administration is leading the trade war into new territory as the trade war reaches a new phase from which it will only get harder to return to normalcy. China announced on Monday that Chinese companies will halt purchases of American agricultural goods. On the same day, Trump made the historic move of labeling China a currency manipulator as China allowed its currency to lose its value to the weakest levels it’s seen in over a decade.

Peter Boockvar, CIO at Bleakley Advisory Group, told clients in a note on Monday “The policy of using tariffs as a tool to address our legitimate beefs with the Chinese has failed miserably.” Many of the leading US financial institutions are concerned that these escalations to the trade war will produce results that are hard to calculate ahead of time. The worst fears are now fears of a recession. Now that the US Treasury Department has officially labeled China as a currency manipulator, you can expect the trade war to intensify even further.