The writer is chief Asia economist at Morgan Stanley

By now, it is abundantly clear that US-China trade has collapsed, as tariff rates are too prohibitive. The recognition of the extent of the disruption to bilateral trade could be an initial gateway towards starting negotiations. As talks progress, there could be room for a mutual agreement to gradually remove the tit-for-tat tariffs — the ones that were put in place by the US after China had retaliated against the imposition of reciprocal tariffs.

But average weighted tariff rates will still end the year 34 percentage points higher than they were at the start of the year (which were then at an 11 per cent level imposed after the first round of trade tensions in 2018-19). Investors should accept that fixing the issues underpinning trade tensions is not going to be quick and easy, for the following reasons.