diff --git a/src/Tasks/Microsoft.NET.Build.Tasks/targets/Microsoft.NET.Sdk.BeforeCommon.targets b/src/Tasks/Microsoft.NET.Build.Tasks/targets/Microsoft.NET.Sdk.BeforeCommon.targets
index 4550d18f5062..6f5100260835 100644
--- a/src/Tasks/Microsoft.NET.Build.Tasks/targets/Microsoft.NET.Sdk.BeforeCommon.targets
+++ b/src/Tasks/Microsoft.NET.Build.Tasks/targets/Microsoft.NET.Sdk.BeforeCommon.targets
@@ -236,10 +236,25 @@ Copyright (c) .NET Foundation. All rights reserved.
     </ItemGroup>
   </Target>
 
+  <!-- Remove TRACE when DisableDiagnosticTracing is true -->
+  <Target Name="_DisableDiagnosticTracing"
+          Condition="'$(DisableDiagnosticTracing)' == 'true'"
+          DependsOnTargets="GenerateTargetPlatformDefineConstants;GenerateNETCompatibleDefineConstants;GeneratePlatformCompatibleDefineConstants"
+          BeforeTargets="CoreCompile">
+    <ItemGroup>
+      <_DefineConstantsWithoutTrace Include="$(DefineConstants)" />
+      <_DefineConstantsWithoutTrace Remove="TRACE"/>
+    </ItemGroup>
+
+    <PropertyGroup>
+      <DefineConstants>@(_DefineConstantsWithoutTrace)</DefineConstants>
+    </PropertyGroup>
+  </Target>
+
   <!-- Add implicitly defined preprocessor symbols to DefineConstants -->
   <Target Name="AddImplicitDefineConstants"
           Condition=" '$(DisableImplicitFrameworkDefines)' != 'true' "
-          DependsOnTargets="GenerateTargetPlatformDefineConstants;GenerateNETCompatibleDefineConstants;GeneratePlatformCompatibleDefineConstants"
+          DependsOnTargets="GenerateTargetPlatformDefineConstants;GenerateNETCompatibleDefineConstants;GeneratePlatformCompatibleDefineConstants;_DisableDiagnosticTracing"
           BeforeTargets="CoreCompile" >
     <PropertyGroup>
       <DefineConstants Condition=" '@(_ImplicitDefineConstant)' != '' " >$(DefineConstants);@(_ImplicitDefineConstant)</DefineConstants>
diff --git a/src/Tests/Microsoft.NET.Build.Tests/GivenThatWeWantToBuildANetCoreApp.cs b/src/Tests/Microsoft.NET.Build.Tests/GivenThatWeWantToBuildANetCoreApp.cs
index 2f6d197eca6f..5ed91b6038e1 100644
--- a/src/Tests/Microsoft.NET.Build.Tests/GivenThatWeWantToBuildANetCoreApp.cs
+++ b/src/Tests/Microsoft.NET.Build.Tests/GivenThatWeWantToBuildANetCoreApp.cs
@@ -1028,5 +1028,49 @@ public void It_warns_on_nonportable_rids(string targetFramework, string[] rids,
                 result.Should().NotHaveStdOutContaining("NETSDK1206");
             }
         }
+
+        [Theory]
+        [InlineData(true, "TRACE DISABLED")]
+        [InlineData(false, "TRACE ENABLED")]
+        public void It_can_use_implicitly_defined_compilation_constants(bool disableTracing, string expectedOutput)
+        {
+            var testProj = new TestProject()
+            {
+                Name = "DisableTracing_" + disableTracing.ToString(),
+                TargetFrameworks = ToolsetInfo.CurrentTargetFramework,
+                IsExe = true,
+            };
+            if (disableTracing == true)
+            {
+                testProj.AdditionalProperties["DisableDiagnosticTracing"] = "true";
+            }
+
+            testProj.SourceFiles[$"{testProj.Name}.cs"] = @"
+using System;
+class Program
+{
+    static void Main(string[] args)
+    {
+        #if TRACE
+            Console.WriteLine(""TRACE ENABLED"");
+        #endif
+        #if !TRACE
+            Console.WriteLine(""TRACE DISABLED"");
+        #endif
+    }
+}";
+            var testAsset = _testAssetsManager.CreateTestProject(testProj, identifier: disableTracing.ToString());
+
+            var buildCommand = new BuildCommand(Log, Path.Combine(testAsset.Path, testProj.Name));
+            buildCommand
+                .Execute()
+                .Should()
+                .Pass();
+
+            var runCommand = new RunExeCommand(Log, Path.Combine(buildCommand.GetOutputDirectory(ToolsetInfo.CurrentTargetFramework).FullName, $"{testProj.Name}{EnvironmentInfo.ExecutableExtension}"));
+            runCommand
+                .Execute()
+                .Should().HaveStdOut(expectedOutput);
+        }
     }
 }