President Donald Trump's trade-focused address to the Economic Club of New York later Tuesday could cement the current rally that has lifted U.S. stocks to recent record highs or send investors into a year-end retreat should he decide to pile further pressure on an already-weakened Chinese economy.

Trump is expected to devote most of his address to the famous Economic Club in Manhattan on trade, tariffs and the broader economy amid speculation he could signal a willingness to roll back tariffs on China-made goods and possibly announce a delay on proposed levies on European-made cars for another six months.

White House spokesman Judd Deere would only say that investors can "expect the president to highlight how his policies of lower taxes, deregulation, and fair and reciprocal trade have supported the longest economic recovery in U.S. history." 

However, with the president offering varying -- and at times contradictory -- characterizations of the state of U.S.-China trade talks in recent weeks, investors will be primed for a specific assessment of both the prospect of a "phase one" agreement before the end of the year and a roll back on tariffs currently being paid on around $360 billion worth of China-made goods.

"We want to see the ink dry before we're convinced the tariff picture really has changed, given the recent history of excitement followed by disappointment over the trade war," said Ian Shepherdson of Pantheon Macroeconomics.

"But the odds on something good happening appear better now than at any time since late April, when Treasury Secretary Mnuchin claimed -- wrongly, it turned out -- that negotiations over a comprehensive deal were on the 'final laps,'" he added. "This time, with a much less ambitious set of proposals, the chance of getting over the finish line is much better."

Trade has topped the list of investor concerns for much of the 16 months that world's two biggest economies have battled over tariffs, market access and unfair business practices, according to the closely watched fund manager's survey published by Bank of America Merrill Lynch. 

"The hope is that Trump will shed some light on his trade policy in general and specifically on how close U.S. and China are to a deal, possibly providing more details about the key points (tariff removals, intellectual property) as well as an indicative timeline," said ING foreign exchange strategist Francesco Pesole. "Without a clear list of topics to be included in the address, the potential for surprise is high, and so are the implications for (currency markets)".

Trump's strategy, however, could be to rely on the continued strength of the U.S. economy, which is currently helping extend one of the longest equity rallies in history, while tightening the screws on a Chinese economy that has slowed to its weakest pace of growth in 30 years.

On the other hand, tariffs on $175 billion in China-made goods, including toys and consumer electronics that are set to kick in on Dec. 15, could blunt holiday sales, cap equity market gains heading into the 2020 election cycle and neutralize the president's most valuable political asset.