U.S. President Donald Trump waves to journalists as he walks across the South Lawn before boarding Marine One and departing the White House in Washington, DC. Trump is traveling to Camp David.Members of the Trump Family depart White House, Washington DC, USA - 01 Jun 2018

Welcome to the new age of uncertainty.

Fears rose in the fashion industry Tuesday after President Trump escalated his tit-for-tat trade war with China, ordering officials to identify a further $200 billion in Chinese imports that could be slapped with tariffs.

The threat, if carried out along with tariffs on $50 billion in goods set last week, would levy higher duties on nearly half of the $505 billion in goods imported from China annually. Top executives expect that the trade war, if it carries on like this, will hit the fashion industry directly, raising costs at the border for Chinese-made apparel. Higher duties would eventually be passed on to consumers who would likely dial back their spending, hurting retailers just as business is starting to look up.

Investors, who have largely taken the high-level back-and-forth in stride, started getting antsy and sold.

Among the U.S. fashion companies suffering declines on Wall Street Tuesday were: Stitch Fix Inc., down 4.5 percent to $26.27; Under Armour Inc., 3.3 percent to $20.86; Michael Kors Holdings Ltd., 2.4 percent to $67.02; PVH Corp., 1.9 percent to $160.39; Nike Inc., 1.8 percent to $74.26; Lululemon Athletica Inc., 1.2 percent to $128.10, and VF Corp, 1.2 percent to $83.45.

In the broader market, the Dow Jones Industrial Average shed 287.26 points, dropping 1.2 percent to 24,700.21, while the S&P 500 slipped 0.4 percent to 2,762.57. In China, the Shanghai Composite Index dropped 3.8 percent to 2907.82, its worse performance since February. Europe could also suffer collateral damage in the trade war and London’s FTSE 100 closed down 0.4 percent at 7,603.85, its third-consecutive day in the red. France’s CAC 40 and Germany’s Dax also finished the day down 1.1 and 1 percent, respectively.

“It’s not an overreaction,” said Paul Ashworth, chief North American economist at economic consultancy Capital Economics.

“It’s never just about what’s being announced today,” he said. “It’s where it might go next. Back in the election campaign, Trump initially talked about tariffs of 30 percent or 40 percent on all Chinese imports so maybe that’s the end game.”

Retailers will have little immediate recourse should tariffs start to rise so dramatically.

According to Rajeev Dhawan, director of the Economic Forecasting Center Georgia State University, for the industry to counteract the impact of any potential tariffs, it would either have to hope for the dollar to appreciate — something that is out of its control — or find ways to make its businesses more efficient, which could take years and not weeks.  

“It will spur innovation in the industry and also lead to some mergers and maybe some streamlining of the designing process, but all this will take time, so the industry is going to have to face the music for now,” he said.

Investors were already on edge after the International Monetary Fund warned last week that the President’s new tariffs could undermine the global trading system and harm the U.S. economy.

The Washington-based lender of last resort cautioned that these measures “are likely to move the globe further away from an open, fair and rules-based trade system, with adverse effects for both the U.S. economy and for trading partners.”

And all this came as the industry was just breathing a sigh of relief.

Fashion emerged largely unscathed on Friday when the White House unveiled 25 percent tariffs on $50 billion worth of Chinese imports, a move that takes effect July 6 and was presented as a counter to alleged unfair trade practices, including intellectual-property violations and technology theft.

But China did not back down and quickly retaliated, vowing to unleash similar duties on U.S. imports.

That response only fired up the Trump administration leading the President to issue in a strongly worded statement that he directed U.S. Trade Representative Robert Lighthizer to identify another $200 billion of Chinese imports that could be hit with higher tariffs.

“The United States will no longer be taken advantage of on trade by China and other countries in the world. We will continue using all available tools to create a better and fairer trading system for all Americans,” Trump said in the statement issued Monday night.

The war of words fueled concerns over the future of consumer spending and had lobbyists asking for Congress to intervene.

“By pushing for additional tariffs on $200 billion worth of U.S. imports from China, the President is increasing his ‘Trump tax’ without asking for input from Congress and thus raising the cost for American consumers,” said Rick Helfenbein, president and chief executive officer of the American Apparel & Footwear Association.

“Tariffs are a hidden, regressive tax that raise prices, lower sales and hurt American employment,” he said. “Rather than letting this continue, it is time for Congress to utilize its power to regulate commerce with foreign nations, as outlined in the Constitution. Tariffs do not work. Nobody wins.”

The National Retail Federation President and ceo Matthew Shay also chimed in, stating that American families are caught in the middle of a tit-for-tat trade war.

“Higher prices for everyday essentials and lost jobs threaten to sap the energy out of the strong U.S. economy just as most Americans are starting to enjoy the benefits of historic tax reform,” he added.

Conversely, the National Council of Textile Organizations reignited its calls for tariffs on Chinese-produced fashions as it believes that China’s domination of global textile markets has been aided by its “rampant theft of U.S. textile intellectual property.”

For now, China seems to be waiting to see if Trump follows through.

China’s official Xinhau news service reported that a spokesperson of the Ministry of Commerce said the nation would strike back if the U.S. unveils a list of which products would be covered by the latest round of tariffs.

“Such practice of imposing extreme pressure and blackmailing is contrary to the consensus the two sides have reached through rounds of consultations, and disappoints the international community,” the spokesperson said. “The trade war waged by the United States is against both the law of the market and the development trend of today’s world. It undermines the interests of the Chinese and American people, the interests of companies and the interests of the people all over the world.”