Trump administration officials have welcomed the prospect of a new trade deal with China that includes purchases of US soybeans and a suspension of China’s rare earths licensing system, with the United States freezing or removing some tariffs.

It remains to be seen what will be agreed upon in Donald Trump’s meeting with Xi Jinping this week. However, The measures, which U.S. officials say, appear to restore bilateral relations to the level they were earlier this year.before Trump starts the new trade war with Beijing, as noted by the New York Times.

The United States and China have repeatedly escalated trade tensions, hitting businesses on both sides of the Pacific, before backing down and leading to temporary truces that are quickly crumbling, raising doubts about the viability of a new deal.

Speaking to ABC News on Sunday, US Treasury Secretary Scott Bessent said US and Chinese negotiators who met over the weekend in Malaysia “reached a substantial framework of agreement” to be discussed by the two leaders when they meet Thursday in South Korea.

According to Bessed, 100% increase in US tariffs on Chinese exports planned for November 1 preventedy, while Beijing agreed to delay for a year the implementation of the rare earth licensing system “for review”.

At the same time, China agreed to work with the US to stem the flow of chemicals used to make illegal fentanyl, as well as to make significant purchases of agricultural products from US producers, Bessent added.

On social media, Agriculture Secretary Brooke Rollins called the agreement on Chinese soybean markets “great news.” “China’s commitment to major purchases of U.S. soybeans brings the market back into balance and ensures years of prosperity for U.S. producers,” he wrote.

But critics noted that the Trump administration is claiming credit for solving a crisis of its own making, as China halted soybean purchases earlier this year after imposing a tariff on US imports in retaliation for Trump’s tariffs on Chinese goods in April.

The Chinese government had already started developing the rare earth licensing system a long time agoimplementing the first measures in December in response to tech restrictions imposed by the Biden administration. But it dramatically expanded the system after Trump’s sweeping tariffs were imposed in April, and expanded it even further this month following new U.S. restrictions on technology supplies to thousands more Chinese companies.

Paul Triolo, a partner at DGA-Albright Stonebridge Group, said the Trump administration is pursuing a policy of “escalation for de-escalation,” which he called a “defeat strategy.” “Both sides can hurt each other,” he said, noting that this was the fifth meeting for trade talks focused on Chinese restrictions on rare earths.

“All that has been achieved is a reduction in market share for companies on both sides,” he added.

Donald Trump’s deal-making tactics are unpredictable, and his meeting with Xi Jinping may lead to more deals. Chinese officials have hinted at the possibility of greater purchases of American goods, as well as greater Chinese investment in the United States.

In another interview on NBC’s “Meet the Press,” Scott Bessent said the two sides would likely discuss “more balanced trade,” geopolitical relations in the Middle East and Asia, and the war in Ukraine.

But the talks are far less intense than in Trump’s first term, when negotiators exchanged proposals for months, arriving at a 90-page agreement on issues ranging from intellectual property and banking to agriculture.

On Friday, the Trump administration announced it was launching an investigation into China’s failure to comply with the terms of that deal.

Jonathan Chin, a researcher at the Brookings Institution in Washington, pointed out that Xi is coming to the meeting just days after announcing China’s new five-year plan, which calls for boosting industry and technology.

As he said, these plans run counter to persistent US concerns about China’s trade practices, which were the starting point of the commercial confrontation. However, these issues seem to be absent from the agenda of the meeting.

“It’s really impressive,” commented Chin, “not only that they don’t talk about them, but that they now focus on individual issues, for example, TikTok or soybeans, that is, sectors or even corporate issues, instead of touching on the substantive issues that are at the core of the trade conflict from the beginning.”

Compared to Donald Trump’s first term, Washington and Beijing now appear much more willing to take drastic measures against each other, to the detriment of companies that depend on their trade relationship.

In Trump’s first trade conflict with China, his tariffs were as high as 25 percent, but they applied to only a portion of Chinese exports.

This time, within the first months of his new term, Trump imposed a 20% tariff on all Chinese exports, citing China’s role in trafficking fentanyl to the United States. He later added an additional duty of 125%, which he later reduced to 10%.

His administration has also imposed tariffs on Chinese ships calling at US ports, expanded technology restrictions and threatened new 100% tariffs on Chinese goods from November 1.

While most foreign governments have not responded to Trump’s aggressive trade policies, China has been an exception. Beijing retaliated with tariffs on US exports, including soybeans, and launched investigations into major US companies such as Nvidia and Qualcomm.

At the same time, he announced an “anti-discrimination” investigation that could lead to new measures against US companies beyond the rare earth restrictions.

American businesses are caught in the middle. According to market analysts, some factories are just weeks away from suspending production if they do not secure additional stocks of Chinese metals and rare earth magnets.

Some companies fear that conflicting laws and regulations from Beijing and Washington could prevent them from complying with both sides.

Ivan Medeiros, a professor at Georgetown University and a senior adviser at the Asia Group, said Chinese officials believe they now understand Donald Trump better than they did in his first term and know how to respond more effectively.

The willingness of both sides, the US and China, to take aggressive actions against each other creates an “inherently unstable” situation capable of undermining any truce, he added.

“Both sides approach the relationship with confidence,” Medeiros said. “Both believe the other needs them more, and ultimately both believe they have the upper hand. This,” he concluded, “is an extremely dangerous point of balance.”