A growing U.S.-China trade spat could hurt oil demand growth this year and next if the global economy takes a hit, the International Energy Agency (IEA) warned on Aug. 10.

Beijing this week responded to threats by the Trump administration by announcing plans to hit $16 billion worth of U.S. goods with a 25% tariff—from bicycles and medical equipment to coal and diesel.

“Trade tensions might escalate and lead to slower economic growth, and in turn lower oil demand,” the energy group said in its monthly market outlook.