Trump praised his relationship with Xi and spoke optimistically about getting a deal.
"I think we have a chance. I know that China wants to make a deal. They don't like the tariffs, and a lot of companies are leaving China in order to avoid the tariffs," he told reporters at the White House.
"I think the meeting might very well go well, and frankly our people are starting to deal as of tomorrow. The teams are starting to deal. So we'll see. China would like to make a deal. We'd like to make a deal, but it has to be a good deal for everybody."
Trump's tweet offered fresh fuel to a rally on Wall Street as investors bet renewed talks could diffuse the trade war. The S&P 500 gained nearly 1%, while the Nasdaq and Dow Jones Industrial Average both gained around 1.4%. All closed at their highest levels since early May when Trump knocked global stock markets by ratcheting up tariff rates on $200 billion of imported Chinese goods.
"This is a very positive development," said Clete Willems, a former trade negotiator with Trump's team.
"Leader level engagement at last year's G20 was critical to jumpstarting the talks," he said, citing last year's meeting between Xi and Trump at the G20 in Argentina. "It will be essential to managing the current political dynamic and getting the talks back on track once again."

Fresh negotiations

White House economic adviser Larry Kudlow declined to give details on how the two countries would prepare for the Xi-Trump meeting and said the United States would continue to press for China to change its practices on intellectual property theft and requirements that U.S. companies share their technology to do business in China.
"Our position will continue to be (that) we want structural changes. We want structural changes on all the items ... theft of IP, forced transfers of technology, cyber hacking. Of course trade barriers. We've got to have something that's enforceable," he told reporters at the White House.
The two sides were close to a deal in May that addressed many of those concerns. But China sought to soften the legal requirements in the text of the deal, and the United States balked.
According to Chinese state media, Xi told Trump that the China-U.S. relations had encountered difficulties. "If China and the United States cooperate, both benefit. If they fight, both get hurt," state media paraphrased Xi as saying.
Beijing wants the United States to lift its tariffs, but U.S. Trade Representative Robert Lighthizer, who has spearheaded negotiations, said on Tuesday that talks alone were not enough.
"I don't know if it will get them to stop cheating, tariffs alone. I think you don't have any other option," Lighthizer told a congressional hearing. "I know one thing that won't work and that is talking to them. Because we've done that for 20 years."
Reporting by Jeff Mason; additional reporting by Susan Heavey, David Alexander, Makini Brice, Alexandra Alper, Steve Holland and Ben Blanchard; editing by Susan Thomas, Tom Brown, Cynthia Osterman and Leslie Adler