US President Donald Trump has claimed that the "very good relationship" he enjoys with his Chinese counterpart Xi Jinping will make it "possible" to strike a new trade deal with China. Addressing reporters on Air Force One on Wednesday,

One month into his second term in office, Trump has threatened sweeping tariffs on allies and adversaries alike -- targeting China as well as neighbors Canada and Mexico, and the European Union -- and using levies as his main policy tool for lowering the massive US trade deficit.

U.S. officials are considering whether they can strike a deal with China that would ramp up its purchases of American goods and investments in the United States.

President Donald Trump's comments have raised hopes of a de-escalation in the trade war between the world's two largest economies. This has further strengthened the Chinese currency and stock markets,