Goldman Sachs Group Inc. analysts are looking at how a trade war between the U.S. and China would hurt growth in the world’s biggest economies, and the outlook isn’t pretty.

If President Donald Trump imposes punitive tariffs against China of up to 10 percent, the country’s exports to the U.S. will fall as much as 25 percent, Ha Jiming, a China vice chairman at Goldman in Hong Kong, said in an article published by China Finance 40 Forum, a non-government research organization. Under that scenario, the Asian nation’s annual economic growth would decrease by as much as 1 percentage point, he wrote.

Should Beijing retaliate, trade with the U.S. would also suffer and its economic growth could fall by as much as a quarter percentage point, Ha, who is also an investment strategist, said in the article dated Feb. 7. The $18 trillion U.S. economy expanded 1.6 percent last year, compared with 6.7 percent for China’s $11 trillion of output.

“To prevent such a trade war, China could take measures including promoting outbound tourism or opening service industries such as business and finance to the U.S.,” wrote Ha “That will help the U.S. export services to China and ultimately to reduce its trade deficit.”

Trump’s combative trade stance threatens to derail growth in export-dependent economies around the globe, with the president threatening punitive tariffs on China, Mexico and other nations he blames for the loss of American manufacturing jobs. China, the U.S.’s biggest creditor and trading partner, has been criticized by Trump for manipulating its currency.

In the near term, Trump’s administration is likely to act on China’s currency policy and impose targeted tariffs on products that face heavy competition from Chinese imports, such as steel, large appliances, machinery or auto parts, according to a separate Feb. 6 report by Goldman’s Chief Asia-Pacific Economist Andrew Tilton and Senior U.S. Political Economist Alec Phillips. Trump may threaten blanket tariffs as an additional measure if needed, they said.

China is likely to respond proportionately, particularly as it undergoes a twice-in-a-decade political transition later this year, according to the report from Tilton and Phillips. Instead of tariffs, China could reallocate reserves out of U.S. Treasuries, or fix the yuan weaker against the dollar, or facilitate regional trade deals -- something already underway, the report said.

The Goldman economists also suggested that the U.S. could seek to reduce its trade deficit with China with other measures, including protecting intellectual property and enhancing services exports. America’s trade deficit with China narrowed to $347 billion in 2016, down 5.5 percent from 2015, according to data from the U.S. Commerce Department.

Besides the damage to the U.S. and China, a trade war would very likely hurt smaller open economies in Asia such as South Korea and Taiwan that are closely linked to global supply chains, the report said.