Mr Trump also said he would allow US companies to continue to sell to the Chinese tech giant Huawei, in a move seen as a significant concession.
Mr Trump had threatened additional trade sanctions on China.
However, after the meeting on the sidelines of the main G20 summit in Osaka, he confirmed that the US would not be adding tariffs on $300bn (£236bn) worth of Chinese imports.
He also said he would continue to negotiate with Beijing "for the time being".
And at a subsequent press conference, the US president declared that US technology companies could again sell to China's Huawei - effectively reversing a ban imposed last month by the US commerce department.
President Trump has positioned his trade talks with Xi Jinping as a win for the US - but he may have also given Beijing exactly what it wants on Huawei.
It is still not clear whether what Mr Trump has announced is a complete reversal - but if it is, it would be a significant concession by the US on a company that Washington has said is a threat to national security.
The resumption of talks and pressing the pause button on more tariffs will be seen in the short term as positive for markets and American businesses. Those have already complained about the cost of further tariffs saying that if they had gone ahead - American consumers would have ended up paying something like $12bn more in higher prices
Chinese businesses have been suffering too - the trade war has hit investment plans, business confidence, and exports in the world's second largest economy. But pressing pause doesn't mean the trade war is over. Tariffs on hundreds of billions of dollars worth of goods are still in place. And the two sides still have much to agree on.
Washington wants Beijing to fundamentally change the way China's economy has grown over the past four decades - get rid of subsidies to state owned companies, open up the domestic market and most importantly, hold China to account if it fails to deliver on any of these commitments.
But Beijing has already publicly said that it won't budge on issues of principle or bow to US pressure.
How the two sides close that gap will be the real test of any trade truce. For now - it is a positive thing that they're talking again. But talking can only take you so far.