President Donald Trump answers questions in the Oval Office of the White House in Washington, August 20, 2019.

Kevin Lamarque | Reuters

Citi no longer sees a conclusion to the trade war with China before the next U.S. presidential election, the investment bank said in a research report on Wednesday.

“[The] base case for the trade war now is no deal before the 2020 US election,” Citi said.

Negotiations between the U.S. and China broke down last month and both countries added new tariffs on each other, beginning on Sept. 1. As the trade war continues, Citi expects U.S. economic metrics, such as consumer fundamentals, will “likely deteriorate further,” the firm said.

“Implied probabilities of a 2020 recession are now high enough to warrant caution,” Citi said.

– CNBC’s Patricia Martell contributed to this report.



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