As President Donald Trump dials up trade tensions, the stock market is taking another blow. One macro strategist warns U.S. economic growth could be one of the next casualties of an all-out trade battle.

“Trade wars, in the short run and even in the long run, they do not benefit anybody,” Gina Sanchez, CEO of Chantico Global, told CNBC’s “Trading Nation” on Friday. “Oxford Economics has an estimate that it could lop off between 0.3 percent and 0.4 percent of U.S. GDP. That kind of GDP growth to a country that, at its best, might grow at 2 percent, that’s pretty significant.”

The U.S. economy is expected to expand by 2.8 percent in 2018 as higher deficit spending and tax cuts boost growth. That expansion should slow to 2.4 percent in 2019, according to FactSet estimates.

Higher trade barriers and slower growth would ripple through to impact other business costs, said Sanchez.

“You’re talking about a pretty significant slowdown because it’s inflationary,” said Sanchez. “Input costs are going up and labor costs are going up. What’s going to happen to the margin? That’s the challenge that we’re facing. I do think it’s time to start considering getting very defensive.”

After a weak start to the year, defensive sectors such as consumer staples and utilities have begun to break out. The consumer staples sector is the best performer of the S&P 500 in June so far, while telecoms and utilities are both up 1 percent.

Recent gains aside, there are bargains to be found in defensive areas of the market, according to Larry McDonald, editor of the Bear Traps Report.

“It’s an extremely popular strategy to move into aggressive growth,” McDonald said on Friday’s “Trading Nation.” “The unloved sectors, whether it be telecom or consumer staples, these are the cheapest they’ve been, probably the second cheapest, in the last 50 years relative to growth.”

Once capital begins to transition to defensive names over growth stocks, these sectors could see a major swing higher, added McDonald.

“This transition of capital that would move from one sector to the other, this rotation, it wouldn’t take much to have a 10 to 15 percent bear market rally in telecom as well as in staples and I think that’s what’s going to happen in the next two to three months,” said McDonald.

The consumer staples and telecom sectors are the worst performers in the S&P 500 in the year to date. Staples are down 10 percent and telecoms have dropped 12 percent.

Is it time to get defensive? from CNBC.