Under the Phase One trade agreement signed between Washington and Beijing on January 15, China is due to import $50 billion worth of U.S.-produced oil and gas over the next two years. But it may not be able to reach this target unless it enacts certain reforms or experiences a surge in demand.
In an article published by Forbes, analyst Ariel Cohen cast doubt on China’s ability to absorb this much additional crude oil and natural gas from the United States. The East Asian state will not be in a position to handle the extra volumes unless it eliminates all tariffs on imported crude oil, cancels some of its contracts with other suppliers, or experiences an unexpected surge in demand, he said.
“[We] should not expect a landmark agreement that ends the trade war — or hostilities,” he commented. “Phase One is merely a temporary cease-fire, and some of its key energy benchmarks are likely not to be achieved.”