President Trump’s trade battle with China is starting to look like a forever war – a quagmire with no end in sight, no clear path to a resolution and more potential land mines for an already weakening global economy.

With his move last week to announce his biggest tariff hike yet on imports from China, the president made clear he was exasperated with counterpart Xi Jinping and a perceived lack of Chinese urgency. While Trump portrayed the threat as a move to pressure Beijing to cut a deal, China responded with a painful measure of its own – letting its currency tumble to the lowest in more than a decade.

By doubling down on a negotiating tactic that has yet to deliver any meaningful results and is damaging the U.S. and Chinese economies, Trump appears to have made any deal less, rather than more, likely. Moreover, it increasingly looks like he and his team may not have any other ideas on where to go next or how to bring an end to the fight.

A man walks past a money exchange shop at Central, a business district of Hong Kong last month. China’s yuan fell below the politically sensitive level of seven to the U.S. dollar on Monday possibly adding to trade tension with Washington. The currency weakened to 7.0177 in early trading following U.S. President Trump’s threat last week of tariff hikes on additional Chinese imports in a fight over Beijing’s trade surplus and technology policies. (AP Photo/Kin Cheung, File) Kin Cheung/Associated Press file photo

“We did not enter this particular trade war with China with a clear plan for how to get out,” said Philip Levy, a member of President George W. Bush’s Council of Economic Advisers who is now chief economist for freight forwarder Flexport. “The plan for how to get out seems to have been ‘We’ll threaten them, they’ll succumb and then we’ll be happy.’ So far we haven’t seen anyone talk about what if they don’t succumb?”

Rather than bend, Chinese officials responded Monday by letting the yuan depreciate and cutting off purchases of American soybeans. They’re pledging to retaliate further if Trump goes ahead with his threat to impose tariffs starting Sept. 1 on Chinese imports. Those include consumer goods like smartphones, kids’ clothes and toys, and together are worth some $300 billion in annual trade, or more than the entire $250 billion already hit with import taxes by Trump.

Investors are starting to grasp the potential for a protracted conflict. U.S. equities last week had their worst week of the year and were tumbling again Monday along with emerging-market currencies. Treasuries rallied with the yen and gold as traders bid up haven assets.

Morgan Stanley economists said in a research note Monday that if the higher U.S. tariffs and China’s retaliation last for four to six months, the global economy will be in a recession in nine months.

The Chinese have sent plenty of signals that they are confident they can weather Trump’s assault. Since May, Xi has called for a new “Long March.” Among the issues mulled at a politburo meeting on the economy before last week’s tariff threat, analysts say, was how to navigate a U.S. escalation.

Chris Johnson, a former CIA analyst who has spent years examining the behavior of the Chinese leadership, said the politburo meeting appeared to finish with a decision that China could survive an economic slowdown related to trade.

Trump’s gambit also comes just as the Chinese leadership heads off for its annual summer retreat. Xi’s enthusiasm to sell a possible deal and the reforms demanded by the U.S. at the retreat, he says, is likely to be diminished after Trump’s tariff threat. “It also gives fodder to those opposed to making concessions in the first place,” Johnson says.

Even before U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin headed to Shanghai for talks last week, people close to the talks said it was unclear whether a deal was even possible.

After the pair returned and briefed Trump that Chinese officials had offered nothing new, he decided to go ahead with the tariffs on Thursday. Adding to the decision, Trump said in announcing it, was a failure by China to deliver on a promise to step up agricultural purchases and thus at least partly reverse what has been a damaging and politically targeted retaliation against a Trump-friendly constituency.

In a pair of weekend tweets Trump insisted he was on the cusp of great successes. “Things are going along very well with China,” he said in one. “Countries are coming to us wanting to negotiate REAL trade deals, not the one sided horror show deals made by past administrations,” he offered in the other.

Whether Trump or those around him ever wanted a deal with China is, of course, still open to debate. Hawks in the U.S. see tariffs as an essential tool in forcing a relocation of supply chains. The president continues to insist China is bearing the cost of tariffs despite evidence from businesses to the contrary.

Trump blames the slowdown in the U.S. economy on what he has labeled policy missteps by the Federal Reserve that have caused an appreciation in the dollar among other things. The Fed last week attributed a decision to cut borrowing costs for the first time in a decade in large part to U.S. trade policy.

For more than a year, Trump has been trying to make the U.S. central bank a scapegoat for a weaker economy and increasingly wants the Fed to join his fight more directly. On Monday, he responded to China’s yuan move by tweeting, “China dropped the price of their currency to an almost a historic low. It’s called ‘currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”

Trump’s aides insist it’s too early to declare defeat for the China strategy. “The best thing to do is negotiate behind closed doors and not get caught up in the hype,” White House trade adviser Peter Navarro told Fox News on Sunday.

The administration is claiming some victories. It successfully renegotiated the 1994 North American Free Trade Agreement, rebranding it the U.S.-Mexico-Canada Agreement, though ratifying it still requires support from Democrats in Congress. Separate threats of tariffs have also drawn wins on immigration policy with Mexico and Guatemala.

On Friday, as markets tumbled from Asia to Europe and the U.S., Trump announced a deal with the European Union to allow more U.S. exports of hormone-free beef to the bloc, a modest win for the administration in a fight that Washington has waged since the 1980s against European restrictions on U.S. hormone-treated beef. The EU is under a Trump threat of tariffs on automotive imports.

Yet the EU beef win pales in comparison to the losses tallied with China. The meat deal with the EU will eventually result in exports worth $420 million annually. In the first six months of this year, the slump in U.S. exports of goods to China versus the same period last year was worth more than $12 billion, according to data released last week.