The U.S. has agreed to delay by 90 days a planned increase in tariffs on $200 billion of Chinese imports so the two nations have time to iron out their trade differences - or at least attempt to do so, the White House said.
Trump and Xi agreed to "immediately" begin talks on Chinese industrial policies, including coercive licensing of USA technology, trade secret theft and non-tariff trade barriers.
After 90 days, if there's no progress on structural reform, the USA will raise those tariffs to 25 percent, White House Press Secretary Sarah Huckabee Sanders said in a statement. "Discussion on economic and trade issues was very positive and constructive".
A Chinese state media report said that the meeting had reached "an important consensus", pointing out "the direction for Sino-US relations in the near future".
The two sides would "step up negotiations" toward full elimination of all additional tariffs, Wang said.
The pledge to enhance cooperation with the U.S.to fight illegal drugs including fentanyl and related substances emerged from a highly anticipated dinner between Trump and Xi on Saturday in Buenos Aires that yielded a truce in the trade war between the two countries.
On Air Force One, Trump told reporters he would "absolutely consider it and probably" accept such a measure.
Ahead of the G-20, the USA planned to increase tariffs on $200 billion in Chinese goods from 10% to 25%, effective January 1.
China has targeted $110 billion worth of U.S. imports for tariffs.
US officials for years have been pressing the Chinese government to take a tougher stance against fentanyl, which is 50 times more powerful than heroin.More news: First Premier League Start For Obafemi Against Surprising Man United Team
Kudlow said the administration has been "extremely disappointed" by China's engagement in trade talks but the meeting between Trump and Xi on the sidelines of the Group of 20 summit could be a game-changer. The news was first reported by Chinese state-run television, and then by Bloomberg in the U.S.
Prior to having dinner with Trump, Xi said he was "very happy" to have an opportunity to address issues with the USA leader. The world's two biggest economies have also increasingly been at odds over security in the Asia-Pacific region.
The White House also said that China's government is "open to approving" the purchase of Dutch semiconductor manufacturer NXP by American chipmaker Qualcomm.
Playing down domestic concerns of any compromise by China giving in to Trump's demands, it said "the Chinese public needs to keep in mind that China-US trade negotiations fluctuate". The White House released the names of the two delegations, totalling 20 people in addition to the two leaders. The presidents have come to an agreement on stopping the imposition of additional tariffs.
However, the state of the Chinese economy has been putting pressure on Xi, as economic growth has slowed this year, battering its stock market.
Crucially, the trade truce makes no mention of China's tech ambitions.
It said signatories to the Paris Agreement reaffirmed that the Paris Agreement is irreversible and commit to its full implementation, while the USA reiterated its decision to withdraw from the Paris Agreement. China responded by imposing its own round of tariffs. The European Union is also pushing for sweeping changes to how the WTO operates. President Trump and President Xi discussed trade during a two hour long dinner with their most senior representatives in Buenos Aires, Argentina.
On climate change, the United States once again marked its differences with the rest of the G20 by reiterating in the statement its decision to withdraw from the Paris Agreement and its commitment to using all kinds of energy sources.
Meanwhile, the USA stood alone as the 19 other countries again pledged to implement the Paris accord to fight climate change.
It comes as International Monetary Fund (IMF) director Christine Lagarde urged G20 leaders to urgently de-escalate trade tensions and reverse tariff hikes.