Morgan Stanley has again issued a warning that president Donald Trump is leading the United States towards a recession with his ramped-up trade war against China.

In its newest warning made Tuesday, Morgan Stanley said Trump’s trade war is putting U.S. corporate profits and economic growth at risk, and cited a slump in economic data as an indicator of this outcome. It also said the fortunes of Wall Street and the economic outlook for the United States as a whole is “deteriorating.”

“Recent data points suggest U.S. earnings and economic risk is greater than most investors may think,” wrote chief U.S. equity strategist Michael Wilson.

A slowdown in both the manufacturing and services sector coupled with the inverted curve for the benchmark 10-year Treasury yield means the U.S. is now on a “recession watch.”

“The adjusted yield curve inverted last November and has remained in negative territory ever since, surpassing the minimum time required for a valid meaningful economic slowdown signal,” wrote Wilson. “It also suggests the ‘shot clock’ started 6 months ago, putting us ‘in the zone’ for a recession watch.”

Wilson called attention to a recent survey by global financial data provider IHS Markit revealing U.S. manufacturing activity plunging to a nine-year low in May. IHS Markit also uncovered a notable slowdown in the U.S. services sector, a vital tech-led growth area for the economy.

Wilson estimates many leading companies “might throw in the towel on the second half rebound --something we have been expecting but we believe many investors are not.”

Wilson also warns investors might be caught in a “rolling bear market ” for the next several years. Many economists predict an anemic second half of the year. Morgan Stanley economists have reduced their Q2 U.S. GDP forecast to 0.6% from 1.0%.

“The April durable goods report was bad, particularly the details relating to capital goods orders and shipments. Coming on the heels of last week’s crummy April retail sales report, it suggests second quarter activity growth is sharply downshifting from the first quarter pace,” said Morgan Stanley economists.

On May 14, Morgan Stanley predicted a recession if Trump pushed ahead with recent threats to implement tariffs on Chinese imports that haven’t yet been hit with higher tariffs.

The Trump administration boosted duties on $200 billion in goods from China to 25% from 10% on May 17. China responded on May 20 with promises to increase tariffs on $60 billion in U.S. imports.

In retaliation, Trump threatened to raise taxes on the remaining $300 billion worth of goods that China exports to the U.S. This means the U.S. will have taxed all of China’s imports.

If the tariffs on the $300 billion goods is implemented, the potential cost of these duties could represent a decline of 1% to 1.5% in the S&P 500, and a 0.84% reduction in companies’ net income, said Morgan Stanley.

Worse, “the demand destruction and ailing confidence increase the potential impact well beyond just higher costs, and would likely lead to an economic recession in our view,” wrote Mike Wilson, Morgan Stanley’s chief investment officer, in a note to clients on May 20.