I believe OP is asking to ignore all whitespaces (including between words) not just trailing whitespaces.
Unfortunately, it's still not implemented and you can track the process status here: https://github.com/Microsoft/vscode/issues/43026
On the top right corner in diff view, there is a "Show Leading/Trailing Whitespace Differences" button (¶, called pilcrow or paragraph mark) to trim whitespace: