Vice President Harris has recently been criticized for her promise to take on corporate “price gouging” if elected, with some prominent economists and Wall Street titans noting that price controls, or similar policies, have rarely been effective historically. 

Former President Trump, meanwhile, has been under pressure for his aggressive tariff proposals, with experts warning they could lead to a tit-for-tat trade war with China, exacerbate inflation, or even help spark a U.S. recession in a worst-case scenario.

In spite of this criticism, Trump has doubled down on his plan to implement a “universal baseline tariff” on most imports if elected, as well as a tariff of 60% or more on all Chinese imports.

“We are going to have 10% to 20% tariffs on foreign countries that have been ripping us off for years,” the former president said at a rally in North Carolina on Wednesday.

Trump, who has previously said “trade wars are good and easy to win” and called himself the “Tariff man,” has railed against the loss of U.S. manufacturing jobs owing to the importation of cheap foreign goods, particularly from China, for years, often turning to tariffs as a solution. But while tariffs can have their place in economic policy to help protect nascent or defense-critical industries, experts say broad tariffs can be dangerous, mostly because they will force a response from affected nations.

Joachim Klement, an investment strategist at U.K.-based investment bank Panmure Liberum, did the math on the potential impact of Trump’s tariff policies—and the trade war he believes they’d likely cause—in a soon-to-be released report seen by Fortune. He found that Trump’s proposed blanket 10% tariff on foreign imports, and a 60% tariff on all Chinese imports, would lead to a 1.2 percentage point increase in inflation in the first year after its signing.

“I would definitely worry about a significant inflation shock,” he told Fortune via phone Thursday. “Basically assume that next year inflation in the U.S. is, say, 2.5% on average, with the trade war it would go up to 3.7%.”

Klement—who publishes a Substack called “Klement on Investing” and is the author of 7 Mistakes Every Investor Makes and Geo-Economics: The Interplay Between Geopolitics, Economics, and Investments—said he doesn’t expect a trade war to push the U.S. into recession next year. However, the impact on the U.S. economy will depend on the trade war’s severity, and the Federal Reserve’s response to the rising inflation that follows.

“Obviously the problem is, if you push inflation close to probably—for individual months—maybe even higher than 4%, that means the Fed has to react. It means the Fed might have to start hiking interest rates again,” he explained. “That’s when you get into trouble.”

How tariffs can help or hurt economies

The U.S. has a long history of enacting broad tariff packages. The first major piece of legislation signed by George Washington after ratification of the Constitution was actually the Tariff Act of 1787, which imposed a 50 cent per ton fee on goods imported by foreign ships to help protect the U.S.’s emergent manufacturing industry and raise government revenues. 

Today, both Trump and Harris are facing calls, as Washington once did, for tariffs to protect budding or defense-critical sectors of the economy, like semiconductors or electric-vehicle batteries. And both candidates have shown their willingness to use tariffs.

Trump famously sparked a trade war with China in 2018 with his decision to implement sweeping tariffs on that country, as well as Canada, Mexico, India, and other countries. Despite using less inflammatory rhetoric, the Biden administration has maintained Trump’s tariffs on Chinese imports, and officials even enacted a new tariff on EV batteries coming out of China earlier this year.

Nancy Qian, an economics professor at Northwestern University, told Fortune this likely means whoever is elected, there will continue to be high tariffs on Chinese goods, and the size and scope of those tariffs will be the key difference between Trump and Harris.

“I would expect the Harris administration to be more systematic and targeted. They’ve been calling their strategy a high fence and small yard—meaning that they want high tariffs only really … to protect a few sectors, like semiconductors, EVs,” she said. “Whereas Trump has been talking about just broad tariffs.”

It’s these overly broad tariffs that experts are concerned about, largely because they force a Chinese response. “The Chinese, whether they want to or not, they have to respond—just because they can’t lose face, they can’t lose domestic standing,” Qian explained. 

The professor warned the U.S. agricultural sector will likely be targeted by the Chinese in response to Trump’s proposed tariffs, offering the dairy industry as an example. China received 13% of all U.S. dairy imports in 2023, according to the U.S. Department of Agriculture. And the populous nation’s appetite for milk and yogurt continues to swell, making it an appealing market for American dairy producers.

“This is a core U.S. industry that could be really hard hit in a trade war,” Qian warned, which would hurt Trump politically if he enacts high tariffs.

It wouldn’t just be the dairy industry under threat, of course. Klement explained that when countries impose broad tariffs, it’s difficult for businesses to find new suppliers overnight. This creates a massive supply-chain disruption, and disrupts exports substantially.

“And that does two things: It creates an inflation shock, and it reduces GDP growth quite significantly,” he said. 

In his study, Klement found the extreme version of Trump’s tariff proposal, a 20% blanket tariff on foreign imports, plus a subsequent trade war, would reduce U.S. GDP by roughly 0.3% in the medium term, and world GDP by nearly 0.4% over the same period. When combined with rising inflation and interest rates, that could lead to problems.

“If you are already in a weak position, because the economy overall is not growing that strongly, it can push a country like the U.S. into recession,” he noted.