President Trump’s plan to slap new tariffs on Mexican imports, weeks after escalating his trade war with China, leaves the United States fighting a multi-front campaign that threatens more instability for manufacturers, consumers and the global economy.

The president’s bombshell announcement that he would impose 5 percent tariffs on Mexican imports, with the possibility of raising them to 25 percent if Mexico doesn’t stop migrants from crossing into the United States, left some economists fearing there were few limits to Trump’s appetite for trade conflict.

“In our view, if the U.S. is willing to impose tariff and non-tariff barriers on China and Mexico, then the bar for tariffs on other important U.S. trading partners, including Europe, may be lower than we previously thought,” Barclays economists said in a research note. “We think trade tensions could escalate further before they de-escalate,” Barclays added.

Adam Posen, president of the Peterson Institute for International Economics, called Trump’s move against Mexico a turning point for financial markets and the U.S. economy.

In global markets Friday, investors spooked by new tariff threats sought safety in German government bonds and the Euro rather than their customary dollar-denominated havens. This “seems to me an indicator that the concerns about the U.S. are rising,” Posen said.

The president’s latest move rocked business leaders who were already scrambling to reshape supply chains to avoid fallout from the U.S. confrontation with China. The added uncertainty may paralyze executives who can’t be sure their next supply chain location will be any safer than their last.

The Mexican government tried to defuse the tension Friday, saying the two sides would meet in Washington on Wednesday for high-level talks.

If no solution is found, Mexico is certain to impose retaliatory tariffs on U.S. goods, with likely targets including U.S. pork, beef, wheat and dairy products, said Former Mexican diplomat Jorge Guajardo.

Some prominent Republicans, including Senate Finance Chairman Charles E. Grassley, raised concerns that the new tariffs could threaten a trade agreement the Trump administration clinched only months ago with Mexico and Canada, to replace the 1994 North American Free Trade Agreement.

Others said the about-face treatment of Mexico would damage Trump’s ability to negotiate trade deals it is pursuing with other partners, including China and Europe.

“You can’t negotiate a trade agreement with someone and then turn around and whack them,” said Douglas Holtz-Eakin, a Republican economist and former Congressional Budget Office director.

In late March, Trump threatened to shut the entire southern border to curb illegal immigration, but backed down a week later after an outcry. That has left some wondering how seriously they should take the latest tariff threat.

If Trump follows through with new tariffs on Mexico, it would hurt U.S. economic growth and increase the possibility of the Federal Reserve reversing course and cutting interest rates this year, economists said.

“The drag to the US economy could be meaningful, especially if the tariffs reach 25%,” the upper limit that Trump has set, Bank of America Merrill Lynch economists wrote Friday. Even if the tariff remains at 5 percent, the effective cost could be higher because many parts cross the border several times as products are assembled, and the tariff must be paid upon each crossing into the United States.

U.S. automakers will be among the principal casualties. Last year, the United States imported roughly $350 billion in merchandise from Mexico, including about $85 billion in vehicles and parts, according to the International Trade Administration.

A full 25 percent tax “would cripple the industry and cause major uncertainty,” according to Deutsche Bank Securities.

“The auto sector – and the 10 million jobs it supports – relies upon the North American supply chain and cross border commerce to remain globally competitive,” said Dave Schwietert, interim president of the Auto Alliance, an industry group. “This is especially true with auto parts which can cross the U.S. border multiple times before final assembly.”

“Widely applied tariffs on goods from Mexico will raise the price of motor vehicle parts, cars, trucks, and commercial vehicles – and consumer goods in general — for American consumers,” the industry group said. “The potential ripple effects of the proposed Mexican tariffs on the U.S. North American and global trade efforts could be devastating.”

Consumers could pay up to $1,300 more per vehicle if the tariffs are implemented, according to Torsten Slok, chief economist for Deutsche Bank Securities.

Retailers, technology companies and textile manufacturers also will be hurt. U.S. mills now ship yarn and fabric to Mexico, where it is turned into apparel and exported back to American retailers. Last year, the U.S. textile industry exported $4.7 billion in yarn and fabrics to Mexico, its largest single market.

“Adding tariffs to Mexican apparel imports, which largely contain U.S. textile inputs, would significantly disrupt this industry and jeopardize jobs on both sides of the border,” said Kim Glas, president of the National Council of Textile Organizations.

The new dispute with Mexico came as the U.S.-China trade conflict continued to deepen.

China on Friday announced it would establish a blacklist of “unreliable” foreign companies and organizations, effectively forcing companies around the world to choose whether they would side with Beijing or Washington.

The new “unreliable entities list” would punish organizations and individuals that harm the interests of Chinese companies, Chinese state media reported, without detailing which companies will be named in the list or what the punishment will entail.

Chinese reports suggested the Commerce Ministry will target foreign companies and groups that abandoned Chinese telecom giant Huawei after the Trump administration added Huawei to a trade blacklist this month, which prohibited the sale of U.S. technology to the Chinese company.

At a time when Western corporations have cut back executive travel to China after authorities detained two Canadians on national security grounds in December, the new blacklist sent another shock wave through the business community.

“I think foreign and especially U.S. firms now have to worry that China is creating a new ‘legal pretext’ to at least impose exit bans on foreign individuals who make this new list, if not worse,” said Bill Bishop, the editor of the Sinocism newsletter, referring to the Chinese practice of not allowing designated foreigners to leave China.

Aside from the new blacklist, China in recently days also escalated threats to stop selling the U.S. so-called rare earths — 17 elements with exotic names like cerium, yttrium and lanthanum that are found in magnets, alloys and fuel cells and are used to make advanced missiles, smartphones and jet engines.

Analysts said it could take years for the United States to ramp up rare-earths production, after its domestic industry practically disappeared in the 1990s. Roughly 80 percent of U.S. imports of the material come from China, according to the United States Geological Survey.

The People’s Daily, the Communist Party’s official mouthpiece, carried a stark warning for the United States this week in an editorial about rare earths: “Don’t say we didn’t warn you.”

That commentary surprised China experts because the People’s Daily, which often signals official positions with subtly codified language, uses that phrase sparingly: It famously appeared before China launched border attacks against India in 1962 and Vietnam in 1979.

Damian Paletta contributed to this story. Shih reported from Beijing.

President Trump’s brinkmanship with Mexico over immigration has opened a new and risky front in his global campaign to pressure other nations to capitulate to his demands, a strategy that has paid few dividends over 2½ years and left his major foreign policy initiatives in doubt.

From his “fire and fury” rhetoric against a nuclear-armed North Korea to an escalating trade war with China to new ultimatums aimed at Mexico, Trump has wielded threats, insults and punishments against his foreign counterparts with diminishing returns.

Though he lured Kim Jong Un to the negotiating table through a “maximum pressure” campaign of economic sanctions, Trump’s historic summits with the young dictator ended in failure after talks collapsed in February.

Beijing attempted to negotiate over Trump’s push for a trade deal, but President Xi Jinping has met successive rounds of U.S. tariffs on Chinese goods with commensurate retaliatory measures, deepening an increasingly zero-sum clash between the world’s two largest economies.

And although Mexico took steps to comply with Trump’s hard-line immigration policies — allowing Central American asylum seekers to the United States a temporary haven — Trump’s vow this week to impose sweeping tariffs unless that nation curbs unauthorized immigration into the United States stirred a public backlash.

For Trump, who campaigned on achieving “peace through strength,” the consistent application of a tool kit of toughness has limited his options and left him in a precarious position as he accelerates his campaign for a second term.

Despite his pressure tactics, unauthorized immigration at the U.S.-Mexican border is at a 12-year peak, the tariff wars have sent jitters through Wall Street, and Pyongyang has resumed testing of short-range missiles, a sign that Kim is growing impatient.

“It strikes me that we are in the middle of an unprecedented and multifaceted experiment in the application of brute force,” said Daniel Russel, who served as an assistant secretary of state on Asian affairs in the Obama administration. “President Trump has been extraordinarily effective at generating leverage . . . but it has yet to be shown that he has the ability to translate that leverage into results that are advantageous to the United States or are durable.”

Trump campaigned on the theme that the rest of the world was taking advantage of the United States because of weak political leaders who valued multilateral partnerships over the unapologetic pursuit of national self-interest. He pledged that, as president, he would not hesitate to pressure rivals and allies alike to win a better deal for Americans.

“Mexico must take back their country from the drug lords and cartels,” Trump tweeted Friday. “The Tariff is about stopping drugs as well as illegals!”

Foreign leaders initially sought to placate him by offering modest concessions, hopeful that it would satisfy Trump’s domestic political imperatives by allowing him to trumpet small victories.

The Trump administration renegotiated a bilateral trade deal with South Korea and, after ripping up the 25-year old North American Free Trade Agreement, crafted a new accord with Mexico and Canada that experts said included valuable modernizations of some trade rules.

In Europe, some NATO members moved to accelerate previous pledges to increase their own national defense budgets amid Trump’s complaints that they were freeloading off the United States’ security umbrella — and his vague threats, first issued during his 2016 campaign, that he would pull out the United States of the alliance.

But on his signature initiatives, Trump’s go-to tactics have faltered and the president has grown increasingly frustrated, prompting him in recent weeks to escalate his threats and punitive actions.

In early May, for example, after U.S. negotiators accused Beijing of attempting to backtrack on agreements after months of trade talks, Trump responded by raising tariffs on $200 billion of Chinese goods that he enacted last year from 10 percent to 25 percent.

That prompted Beijing to announce it would “fight to the end” and raise duties on $60 billion of American goods on June 1.

Trump administration officials have said the president feels emboldened by the strength of the U.S. economy and believes he can outlast his rivals in a showdown that could harm both economies. But some analysts said that the president could be dangerously miscalculating his position given the uncertainty of his own political prospects.

“I know that Trump considers the 2020 campaign as a triumphant march to the inevitable [reelection], but that’s not the way the rest of the world is looking at it,” said Christopher R. Hill, who served as a U.S. ambassador under the four presidents who preceded Trump. “You’re already seeing the Chinese holding back and saying, ‘We’ll see what will happen over the next 18 months to see if he’s still around and then maybe we’ll do something.’ To some extent, Trump does not have the self-awareness to understand that people are looking at the window closing on him.”

For Mexican President Andrès Manuel López Obrador, a liberal who took office in December, Trump’s threats are a serious concern, given that 80 percent of Mexico’s exports enter the U.S. market. But López Obrador, who dispatched diplomats to visit Washington on Friday, is facing increasing calls from the public and political columnists to take a tougher line with the White House.

Trump, frustrated by Mexico’s refusal to pay for a border wall, flirted with a plan to seal the southern border to trade and tourism in April before backing off over concerns from advisers about the effect on the American economy. This week, however, amid reports that U.S. authorities apprehended nearly 120,000 unauthorized immigrants at the border last month, Trump overrode similar warnings from aides.

“What’s so striking with him is his willingness to pick multiple fights without thinking through the consequences,” said Eliot Cohen, a former State Department adviser in the George W. Bush administration who organized a “Never Trump” coalition of foreign policy experts during the 2016 campaign. “The Mexico thing is a great example. It could really hurt him domestically.”

Other analysts noted that Trump’s trade war with China could harm his efforts to negotiate a nuclear weapons disarmament pact with North Korea, given that the president has counted on Beijing maintaining tough economic sanctions on Pyongyang.

But Trump has shown few signs of second-guessing himself. He has threatened new auto tariffs on Japan to win leverage in ongoing trade talks, although he announced during a state visit to Tokyo last week that he would delay any action for six months.

And Trump’s reputation for hostility has preceded him. In London, where Trump will arrive next week on a state visit to meet Queen Elizabeth, Sky News broadcast a promotional video featuring a Trump baby balloon, flown by protesters during Trump’s visit last summer, darkening the skies with the ominous tag­line, “He’s back.”

“One of Trump’s major failings is that he only has a hammer,” said Andrea Schneider, a professor of law at Marquette University who focuses on negotiations and has studied Trump’s tactics. “He has no capacity of looking at the long term and recognizing that the vast majority of our interactions in life are repeat interactions. I joke with my students that if you treat negotiations as a one-shot deal, it will be. No one will ever want to deal with you again.”

Karen DeYoung in Washington and Mary Beth Sheridan in Mexico City contributed to this report.