WASHINGTON — US President Donald Trump and China's Xi Jinping said Tuesday they plan to meet next week at the Group of 20 summit in Japan, raising hopes for a truce in an increasingly damaging trade war between the world's top two economies.

Trump said the leaders had a "good" conversation, while Xi said the countries have more to gain by cooperating than by engaging in a protracted battle.

The comments set a more upbeat tone for the talks after worsening tensions created fears over whether the two economic powers would be able to resolve their differences after exchanging steep tariffs on hundreds of billions in exports.

"Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan," Trump said on Twitter.

"Our respective teams will begin talks prior to our meeting."

Xi too was relatively upbeat.

"In recent times, China-US relations have encountered some difficulties, which is not in the interest of either side. China and the US will both gain by cooperating, and lose by fighting," Xi told Trump, according to a readout by Chinese state broadcaster CCTV.

The White House readout of the call said the leaders "discussed the importance of leveling the playing field for US farmers, workers, and businesses through a fair and reciprocal economic relationship."

The US and China seemed close to an agreement when talks collapsed last month after Trump accused Beijing on reneging on its commitments.

He struck out by increasing existing punitive tariffs and cracking down further on Chinese telecom giant Huawei.

The White House repeated that the focus of the talks will be to address "structural barriers to trade with China and achieving meaningful reforms that are enforceable and verifiable."

Trump economic adviser Larry Kudlow warned that there are "no guarantees" of any resolution in Osaka.

"Our position continues to be (that) we want structural changes," Kudlow told reporters.

"They'll have a good conversation. The fact that they're meeting is a good thing."

Trump's tweet sparked a rally on Wall Street, where the multi-front trade battles have repeatedly rankled investors worried about dented corporate profits and disruption to one of the major axes of global trade.

Global markets are concerned about Trump's threat to impose more steep tariffs on China, on an additional $300 billion in goods, which could hurt the already slowing Chinese economy and spread the gloom worldwide.

Trump last week threatened to "immediately" jack up tariffs should Xi fail to show at the meeting. The US already has 25 percent duties on more than $250 billion of imports from China.

In addition to trade, Xi and Trump are expected to discuss US-led efforts to persuade North Korea to give up its nuclear arsenal.

Ahead of the G20 leaders' summit in Osaka, Xi will make the first visit to North Korea by a Chinese president in 14 years. — AFP