The probability of a U.S.-China trade deal being reached prior to the 2020 U.S. presidential elections appears low.

The probability of a U.S.-China trade deal being reached prior to the 2020 U.S. presidential elections appears low.

That’s according to a new report from Fitch Solutions Macro Research, which stated that the latest escalation in the U.S.-China trade conﬂict is likely to put a further dent in the Chinese appetite for U.S. crude.

This appetite has been declining since the fourth quarter of last year amid tariff-related uncertainties and government pressure, the report highlighted.

“China is shown to have imported an average of 520,000 tons of U.S. crude per month over the ﬁrst seven months of 2019, compared to over 1 million tons in 2018, according to customs data,” the report stated.

“This means that China currently remains the 17th largest off-taker of U.S. crude, a marked fall from 11th in 2018,” the report added.

On August 23, China announced tariffs on $75 billion worth of U.S. goods, including American crude oil. On the same day, U.S. President Donald Trump revealed a spate of tariff hikes.

...Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%. Thank you for your attention to this matter! — Donald J. Trump (@realDonaldTrump) August 23, 2019

Last week, the American Petroleum Institute (API) expressed that the escalating U.S.-China trade dispute hurts American energy leadership.

“This escalation of the U.S.- China trade war is another step in the wrong direction, the consequences of which will be felt by American businesses and families,” Kyle Isakower, API’s vice president of regulatory and economic policy, said in a recent organization statement.

At the beginning of August, Trump intensified the trade war by announcing an additional tariff of 10 percent on $300 billion of goods and products coming from China into the United States. Back in July, Trump warned that the trade war could ratchet up further, if the United States wanted.

In June, the API signed a letter urging Trump’s administration to get back to the negotiating table with China.

For more information on how the trade war is affecting the global oil industry, click here. To contact the author, email andreas.exarheas@rigzone.com