German automotive stocks fell after U.S. President Donald Trump threatened to impose a 20 percent tariff on all European car imports, escalating his demand for concessions aimed at lowering the U.S. trade deficit.

Shares of Volkswagen AG, Daimler AG and BMW AG fell in Frankfurt after Trump’s latest broadside, insisting European manufacturers “build them here!” General Motors Co. and other U.S. automakers gave back earlier gains, as concerns spread they too would get caught up in rising global tariffs.

“Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump said in a tweet on Friday.

Friday’s salvo marks a further intensification of Trump’s campaign to tear up trade agreements and extract better terms. The U.S. is renegotiating its Nafta deal with Mexico and Canada, while trading threats with China. German manufacturers, which import 600,000 vehicles to the U.S. each year but are also America’s biggest exporters, are a favorite target. The president has openly lamented the number of Mercedes-Benz logos he sees prowling Fifth Avenue and criticized Germany this week for snubbing American-made Fords.

The risk of a trade war is becoming more real, said Jeff Schuster, senior vice president of forecasting at LMC Automotive, before Trump’s latest salvo.

“A few weeks ago, we thought these issues on trade would fade away,” Schuster said. “What we’re now looking at is extremely disruptive to carmakers for their production setups and profit margins.”

Arndt Ellinghorst, a a London-based analyst at Evercore ISI, estimates the German manufacturers would suffer a financial hit of about 4.5 billion euros ($5.24 billion).

A 20 percent tariff “would be a TERRIBLE (to use modern language) scenario for Germany which is shipping about 600,000 units to the U.S. per year,” Ellinghorst said in a note to clients. “Not a single car could be shipped with a profit to the U.S.,” he said.

While the damage would be steep, Friday’s proposal is actually lower than the 25 percent previously floated by Trump. A surcharge at the higher rate would add around 10,000 euros to the sticker price of a European built car, the European Commission said in a report obtained by Bloomberg News prepared ahead of next week’s summit assessing tariff threats. Duties at this level could be expected roughly to reduce U.S. imports of car and car parts in half.

Daimler, the maker of Mercedes-Benz cars, pared steeper earlier losses to close down 0.3 percent. Fellow luxury-car maker BMW declined 1.1 percent. Volkswagen, less reliant on imports into the U.S., lost 0.2 percent.

General Motors, which had been up as much as 1.5 percent, was little changed in New York. Ford Motor Co. was up 0.2 percent, after a 1.4 percent rise, and Fiat Chrysler Automobiles NV’s New York-trade gave back all of its earlier 2.5 percent advance.

For its part, the EU is worried that U.S. tariffs would cause “severe disruption” to the bloc’s auto industry, according to the paper.

A U.S. tariff on car imports “would call into question the global production model at a time when efforts should be devoted” to developing self-driving features and electric vehicles, the commission said in the paper. “It goes without saying that protectionist measures of this kind will not help U.S. car producers either.”

German manufacturers Volkswagen, BMW and Daimler are the biggest European exporters of cars to the U.S., followed by Fiat Chrysler.