Markets have been tethered to every new trade headline crossing the wires in the past week, but relief could be on its way.
The outcome of an upcoming meeting at the G-20 on Dec. 1 could give a bounce to markets twisted up in the back-and-forth, said professor Stephen Roach, Yale University senior fellow and former Morgan Stanley Asia chairman.
"Both President Trump and President Xi of China would like to walk away from this upcoming meeting in Buenos Aires after the G-20 with something constructive to indicate progress," Roach said Friday on CNBC's "Trading Nation."
What that outcome might be is still in question, said Roach, noting it could be an agreement to further negotiations or a promise from China to buy more U.S. products, such as soybeans. Any hint of progress would send markets higher, he predicted.
Beyond that, the thornier issues including alleged intellectual property theft and state-backed competitive policies could be a sticking point for both parties for some time to come, he said.
"The idea of a little breathing space, buying some time, is a reasonable expectation to hope for but I think the big tough issues are still going to be big and tough in 2019 and 2020 and that's going to be much tougher to untangle," Roach said.
The thought of an easy win for the U.S. is also debatable, said Roach. The Trump administration has reasoned that the U.S. is winning the trade war given its strong GDP and low unemployment, while the Chinese stock market has cratered and growth has slowed.
"That's a myopic perspective. I think that our strength is more short term and we have long-term issues to address because of our saving and deficit issues that remain to be tackled," explained Roach. "It remains to be seen as to whether or not this is really the moment for us to strike and push China into a negotiating corner."
Trump said Friday that China had expressed a willingness to secure a trade deal, but he was still holding out for a "reciprocal" agreement. Trump and Xi are scheduled to meet at the Nov. 30-Dec. 1 G-20 summit in Buenos Aires.