The US has reportedly offered to halve tariff rates on about $350 billion worth of Chinese goods, some of which had climbed as high as 25 per cent, while Beijing would boost purchases of American farm goods, the BBC said in its report.
However, the deal is not expected to address many of the more difficult issues that triggered the fight, like China's subsidies for certain industries.
Asian stock markets rose on Friday after it was revealed that the deal could be announced later in the day.
Japan's Nikkei 225 index rose 2.3 per cent while Hong Kong's Hang Seng put on 2 per cent. The Shanghai Composite added 1.2 per cent.
Earlier, US markets also gained ground with the S&P 500 and the Nasdaq closing at fresh record highs.
Friday's development comes a day after Trump, whois under political pressure with debate on his impeachment underway in the US Congress, tweeted on Thursday that the two economic giants were "very" close to an agreement.
"Getting very close to a big deal with China. They want it, and so do we," he said in the tweet.
Trump has repeatedly declared progress toward a deal that would end the trade war, which has seen tariffs imposed on more than $450 billion worth of US-China trade and weighed on the global economy, reports the BBC.
In October, he announced that the two sides had agreed to terms for a "Phase One" deal, but negotiations dragged on.
Without progress, the US had threatened to impose tariffs on more than $150 billion worth of Chinese exports on December 15.
Unlike earlier rounds of tariffs, this one was slated to fall largely on everyday items, including smartphones, children's books, footwear and clothing, heightening the economic stakes, since the US economy is driven by consumer spending.
( With inputs from IANS )