California officials on Friday braced for what they believe is a significant escalation in President Donald Trump‘s efforts to squeeze the state financially, possibly cutting off all federal funding to the University of California and the California State University systems.

Gov. Gavin Newsom on Friday suggested California consider withholding tens of billions in annual federal tax dollars amid reports Donald Trump is preparing funding cuts targeting the state. Newsom’s suggestion came after CNN reported the president was considering a “full termination” of federal grant funding for California’s universities.

The Trump administration is preparing to cancel a large swath of federal funding for California, an effort that could begin as soon as Friday, according to multiple sources. Agencies are being told to start identifying grants the administration can withhold from California.