In Europe, France's CAC 40 edged 0.2% lower to 5,489 and Germany's DAX picked up 0.2% to 12,272. Britain's FTSE 100 shed 0.3% to 7,397.
Wall Street was set for a quiet open, with the future contract for the S&P 500 index adding 0.2% and that for the Dow dipping 0.1%.
Trump has said he is prepared to place tariffs on $300 billion more in Chinese products, covering everything China ships to the United States, if the talks with Xi don't end in progress.
"The Chinese economy's going down the tubes," he said in an interview with Fox Business Network on Wednesday. "They want to make a deal more than I do."
The South China Morning Post, a Hong Kong newspaper, reported Thursday that the threatened tariffs were expected to be delayed, citing sources in Beijing and Washington.
On Wednesday, U.S. Treasury Secretary Steven Mnuchin told CNBC that the two nations "were about 90% of the way there" with a trade deal. American and Chinese negotiators have completed 11 rounds of trade talks with no agreement.
"Given the unpredictability of President Donald Trump, it would be unwise to be unprepared for a possible scenario where talks descend into disagreements on trade," Lukman Otunuga of FXTM said in a commentary.
"A market-friendly outcome will be for both sides to display cooperation and a strong interest in further negotiations to ease trade tensions that have winded the global economy," he added.
Markets in Asia earlier climbed on trade optimism. Japan's benchmark Nikkei 225 rose 1.2% to 21,338.17 and the Kospi in South Korea climbed 0.6% to 2,134.32. Hong Kong's Hang Seng was up 1.4% at 28,621.42. The Shanghai Composite jumped 0.7% to 2,996.79 and Australia's S&P/ASX 200 added 0.4% to 6,666.30. Shares rose in Taiwan and throughout Southeast Asia.
ENERGY: Benchmark U.S. crude lost 42 cents to $58.96 a barrel. It picked up $1.55 to settle at $59.38 a barrel on Wednesday. Brent crude oil, the international standard, shed 47 cents to $65.22 a barrel. The contract gained $1.41 to $65.69 a barrel in the previous session.
CURRENCIES: The dollar rose to 107.93 yen from 107.79 yen late Wednesday. The euro slipped to $1.1367 from $1.1371.