Over recent days, there have been mixed messages on the prospects for an interim trade agreement between the United States and China, which has reportedly been in the works for several weeks now. On Tuesday, US President Donald Trump suggested that an agreement might have to wait until after the November 2020 US presidential election. But the next day, he told reporters that the negotiations with China were going very well. Other US officials have also said that the talks are in their final stages. Global stock markets then bounced back, after having taken a dive following Mr Trump's remarks on Tuesday. There are still no details on exactly how close the two sides are to an agreement and what issues are holding it up. But experience suggests that it would be prudent not to be optimistic. In May, a trade agreement that was reportedly almost signature-ready was aborted at the last minute.

The economies of the US and China would benefit from a deal, as multiple rounds of tariffs have taken a toll on both. Studies, including by the International Monetary Fund, have shown that so far, the bulk of US tariffs has been borne by American firms and consumers. The impact of the additional tariffs on some US$150 billion (S$204 billion) worth of mainly Chinese-made consumer goods due to take effect on Dec 15 will be particularly severe. American consumers will also be hit by the Trump administration's proposed tariffs of 100 per cent on some French goods in response to France's imposition of a digital tax on US companies, as well as further - as yet unspecified - tariffs on European Union countries because of the EU's subsidies to Airbus, which were deemed illegal by the World Trade Organisation. US farmers - an important political constituency for Mr Trump - have also been affected by China's retaliatory tariffs on US agricultural goods, including soya beans, cotton and apples. At just over US$9 billion, US farm exports to China last year were less than half their level in 2017.