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U.S. Companies Warn Tariffs and Tax Policy Could Make for a Bad 2019

American companies are preparing investors for a less-lucrative 2019, as strategies to forestall trade-war losses wear thin and the tax cut boon tails off.

Third-quarter 2018 per-share earnings for S&P 500 companies are looking healthy, on track to rise 27.1% year-on-year, but those numbers are coming with warnings that the good times may not last. According to The Wall Street Journal, up to a third of that increase is attributable to tax cuts in 2017, and the effect won’t last into 2019. Moreover, price and supply chain adjustments may lose their ability to correct for the effects of the U.S.-China trade war.

In a scenario where the Trump administration increases tariffs on $200 billion of Chinese imports from 10% to 25%—as Trump threatened to do by the end of the year—some analysts say S&P 500 growth could fall to just 2-3%. Tariffs are already hurting american businesses, consumers, and job growth. The corporate tax cut that came into effect in 2018 has also sent the deficit soaring.

Predictions of a lackluster 2019 come on the tail of a month-long market slump that stoked fears about the economy.