Chinese president Xi Jinping and his USA counterpart Donald Trump agreed that trade dispute "should be handled properly through substantial consultation".
Mr Trump has asked key USA officials to begin drafting potential terms, according to the report.
"There's no massive movement to deal with China", Kudlow, the director of the National Economic Council, told CNBC. "[Trump can also] then have someone to blame when the deal falls through, providing the U.S. with a green light to proceed with more tariffs".
Later, Bloomberg News, citing unnamed sources, reported that the president has requested key cabinet secretaries put together an outline deal to call a ceasefire in the painful row.
China and the United States can overcome their differences and get relations back on track if they work together in a spirit of mutual respect, Chinese Premier Li Keqiang told a group of visiting US politicians on Thursday.
Analysts said the figures suggested further tightening in the labour market that could encourage the Fed to raise interest rates, which could trigger a renewed sell-off in the stock market. The CSI300 Index, which represents the market price of Chinese blue-chip firms, gained 3.56%, while the SSE Composite Index gained 2.7% during the day. In Beijing that was seen as an insult to Xi, who sent a personal emissary to Washington for the negotiations, and cemented a view that Trump's real goal was to thwart China's rise.
Trump revealed Thursday that he had spoken with Xi on several subjects, but focused on trade. "Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina".More news: Samsung reveals new 48MP and 32MP ISOCELL smartphone camera sensors
Kudlow believes China is getting isolated in the ongoing trade war, as the United States, Japan, and the European Union officials met in September in NY on the sidelines of the U.N. General Assembly and reached a deal to tackle China's unfair trade practices. He said China wanted to make a deal, adding, "They are not doing well".
Trump risks political blow-back if any deal is regarded as a concession to China.
Yesterday, Trump and Xi spoke by telephone in what both sides described as an positive call.
Investors have become increasingly concerned in recent months that an increase in borrowing costs could act as a drag on the world economy.
The two countries have been locked in an escalating trade war this year, with each side imposing tariffs on hundreds of billions of dollars' worth of imports from the other.
Trump administration officials have said that trade talks with China can not resume until Beijing comes up with specific actions it is willing take to meet USA demands for sweeping changes to policies on technology transfers, industrial subsidies and market access. While Beijing is open to striking a deal that narrows the trade deficit, officials have resisted Trump's other demands - including an end to subsidies for strategic industries, a stop to forced technology transfer and more competition for state-owned enterprises.
Meanwhile, White House economic adviser Larry Kudlow said at an event in Washington that Trump and Xi might be able to break the logjam on issues during the Nov 30-Dec 1 summit.