The European Union estimates that the first wave of Donald Trump’s steel and aluminum tariffs will hit as much as €28 billion ($29.3 billion) of the bloc’s exports in what would be a massive escalation in the US president’s trade war.

European stocks have hit record highs this month, as companies have beat fourth-quarter revenue expectations, but the topic that dominates the conversation among executives in the region is U.S. tariffs.

The trade threats could reduce exports to the United States and dampen investment in Europe, dealing a blow to growth at a time when the continent is already facing a lackluster economy.