President Trump’s call to revoke Hong Kong’s special trade status could have ripple effects that will impair growth and put additional risk on the table because of social and political instability, Ed Harrison told Real Vision during today’s Daily Briefing.

Harrison said that while the markets reacted positively to the news today, the cold war of sorts between the U.S. and China will ultimately be negative for growth and put a headwind on risk assets.

He also said that stripping Hong Kong of its status could threaten its position as a major financial center in Asia and as a result, international capital flows will go to other markets. Harrison thinks the banking center could move to mainland China, and if that happens, China could develop a sphere of influence in the area like the U.S. has in the Americas.

“That is a potential outcome from this new cold war that is happening,” he said. “Nothing is off the table and there’s a lot of volatility in the geopolitical situation going forward.”

As for where growth will come from going forward, Harrison said he expects significant deleveraging and slow growth from Europe and the U.S. That leaves emerging markets to create growth in this environment, but while Harrison said he knows which countries not to bet on (South Africa, Turkey, Argentina), it is difficult to guess which countries will come out better on the other side.