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It is considered the most significant progress yet toward ending a seven-month trade war, according to report from Reuters.
High level talks are being held Thursday and Friday in Washington.
Reuters reports the broad outline of what could make up a deal is beginning to emerge from the talks.
The two sides are pushing for an agreement by Mar. 1.
On that day, a 90-day truce would end that President Trump and Chinese President Xi Jinping agreed to when they met in Argentina late last year.
President Trump said on Tuesday that talks with China were going well and suggested he was open to pushing off the deadline to complete negotiations, saying Mar. 1 was not a "magical" date.
Negotiators are drawing up six memorandums of understanding on structural issues: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade, according to two sources reported by Reuters.