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President Trump has imposed tariffs on $250 billion worth of Chinese goods so far this year.

On Thursday, Trump had what he described as a "long and very good conversation" with Xi.

It is widely believed that the meeting between the two leaders will focus on resolving the trade issue between China and the US.

However, Larry Kudlow, director of the National Economic Council, said yesterday that the United States was "not on the cusp of a deal" with China and that the Trump administration was merely doing "normal preparation" before talks this month.

"The economic teams of the two countries should strengthen contact, conduct consultations on issues of mutual concern, and push for a mutually acceptable solution to China-US economic and trade issues", Xi said.

The deficit in goods and services trade with China increased to $40.2 billion for the month, the highest ever. "But China very much wants to make a deal".

China's official Xinhua News Agency said that Xi accepted the call at Trump's invitation. The maintenance came after months of increasing trade strains, with the United States introducing import tariffs on Chinese goods and the Asian country repeatedly with equal measures.

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"He wants to do it", Trump said of Xi.

Tennessee Senator Lamar Alexander told the official the US and China are competitors not adversaries and suggested they can prosper together.

The trade dispute has also forced the yuan to fall in value but on Friday it was stronger for the first time this week, also helped by Xi's pledge on Thursday of more support for private firms.

The United States has imposed tariffs on $250 billion worth of Chinese goods so far, while China has retaliated with $110billion worth of tariffs on USA goods. "We talked about many subjects, with a heavy emphasis on Trade", Trump tweeted.

China's efforts to get hold of American technology are "an existential threat" to the future of the US economy, according to US Trade Representative Robert Lighthizer.

However, a senior Trump administration reportedly denied that Trump was preparing to make a deal, a CNBC journalist said in a Twitter post on Friday.

The possible thaw in relations comes after months of escalating tensions over trade that threatened to spill into other areas of disagreement, including China's military build-up in the South China Sea. "But the tariffs already imposed will not go away", Tu said.