Allianz chief economist Mohamed El-Erian isn’t confident we’ll see an end to the trade war anytime soon, and he said the best we could hope for at this point is a simple ceasefire.

“The Chinese made a fundamental mistake strategically at the beginning, realizing they should have followed the path of Mexico and Canada in making concessions quickly,” El-Erian said on CNBC, referring to the United States-Mexico-Canada Agreement (USMCA) that is still awaiting congressional approval.

El-Erian also pointed to U.S. President Donald Trump’s comments Monday from the G-7 summit in France that China called and said it’s ready to come back to the negotiating table, saying he was not encouraged by this news.

China announced on Friday morning it was slapping $75 billion in U.S. imports with tariffs, and Trump later announced he was raising the tariffs already in place on Chinese imports in the latest retaliation. Trump said he’s raising the tariff rate on $250 billion worth of Chinese exports from 25% to 30% on Oct. 1, and tariffs on another $300 billion worth of Chinese imports, starting Sept. 1 and Dec. 15, will be 15% instead of the previously announced 10%.

Continued escalation to the tit-for-tat tariffs war like we saw from both sides on Friday make it “much harder to get an agreement,” El Erian said. “So the best we can hope for is not even a truce, it’s a ceasefire. What we saw today is somewhat of a ceasefire.”

Trump also said Friday he was ordering U.S. companies out of China, “including bringing your companies HOME and making your products in the USA,” though, he later backtracked on this statement on Sunday.

El-Erian said U.S. companies are essentially trying to wait out the trade war while “starting to diversify their supply chains” in case things get worse.

“It’s not easy to re-wire what’s taken decades to put in place,” he said. “It would be very difficult for me not to see a significant re-wiring of supply chains around the world.”