If tariffs are retained, some strategists say that would be a negative for the market since uncertainty would remain, and so would the impact on businesses.
"Removing the uncertainty of escalating tariffs should be enough to stimulate capex, but a cut to existing tariffs should provide a significant boost to US capex," Clifton notes.
"As such, a China deal is the most important 'stimulus' Trump could provide in 2019," he wrote.
U.S. Trade Representative Robert Lighthizer last week said the provisions to protect intellectual property are a big part of the working document. The plan is that bilateral meetings would take place on any disputes, and if the talks don't resolve them, the U.S. could impose tariffs.
"By the time you get through all these meetings and Chinese denials, you already did harm to America's businesses and workers. This is the U.S. going back to the Obama and Bush era," said Derek Scissors, resident scholar at American Enterprise Institute."We're in a situation where we're not enforcing our law now, and we're setting up a mechanism which is very similar to past mechanisms where we failed to enforce our laws."
Bianco said even if the deal does come up short in some investors' minds, it would be a positive. He said he expects the S&P to reach 2,950 by year end, and if there was a strong deal with China, removing all tariffs, it could move to 3,000.
But he expects a deal that could retain some tariffs.
"It's not just about trade. It's about trade being a policy tool to get China to the negotiating table, on the topics of trade and many other things," he said. Bianco said trade is an opening to other important issues, like the South China Sea.
"They've taken a lot of risks with the economy to make incremental gains, but this is going in the right direction. Overall it's a pretty good outcome," Bianco said.