Former Treasury Secretary Lawrence Summers warned that the trade war that President Donald Trump’s tariffs have unleashed may bring the U.S. into a recession, Fortune reports.

As many as two million Americans put out of work, Summers said on Bloomberg Television’s Wall Street Week with David Weston.

“It’s more likely than not that we’re going to have a recession — and in the context of a recession, we’ll see an extra 2 million people be unemployed,” Summers said. “We’ll see losses in household income” of $5,000 per family or more.

Trump and other world leaders face “very important choices in the weeks ahead” with regard to tariff plans in excess of those of 1930 that “made the depression great,” said Summers, a Harvard University professor.

It would be wise for countries to “back off the policies that have been announced,” he said.

The stock and bond markets are “speaking with incredible clarity” about their impression of the tariffs, Summers said. When there have been news stories suggesting negotiations or the dialing back of tariffs, stocks surge, and when there are headlines about the plans going forward, stocks plummet.

“There would be a substantial resumption of normality” if the Trump administration backs off its “policy errors,” he said.

Markets are “an important signal of where things are going,” he said.

The stock market may have further to drop, Summers warned: “We’re very likely, in the context of a recession, to see markets reach levels significantly below their current level. I’d be surprised if the bottom is yet in with respect to this phase and markets.”

It will be “enormously costly for the United States and for the world economy” if Washington brings tariffs back to pre-World War II levels, the economist said.

“The losses to markets, if all of this were sure to be implemented, would be many trillion dollars. And the stock market only measures a very small fraction of the losses to the economy from policies of this kind.”

Should the U.S. enter a recession, that could widen the budget deficit, Summers said. “There will be financial distress that will affect higher-risk companies and also higher-risk countries in the global economy.”

The former Treasury chief said investors and consumers can take some relief from the tightening in banking regulations since the 2008 Great Recession. These rules were aimed at bolstering financial firms’ capitalization.

Likewise, Deputy Treasury Secretary Michael Faulkender said Tuesday that “liquidity continues to flow” in spite of market volatility.

“I’m less worried about the internal integrity of markets than I am by the external message that markets are sending — which I think is one of alarm,” Summers stressed.