USA tariffs on $200-billion worth of imports from China are scheduled to rise to 25 per cent from 10 per cent if the two sides don't reach a deal by then, increasing pain and costs in sectors from consumer electronics to agriculture.
Trump has said he did not expect to meet with Xi prior to March 1.
"I think it's going along very well", Trump told reporters in the Oval Office this week. "They're showing us tremendous respect", he added.
"The downbeat outlook for global growth means that this year is likely to be challenging for Chinese exporters, even if the ongoing US-China trade negotiations culminate in a deal", Evans-Pritchard wrote in a research note.
Chinese officials had initially proposed an extension of 90 days, but that was knocked back by the USA side, people familiar with that request said.
Asian stocks steadied and USA stock futures climbed. Treasuries slipped and the yen dipped.
Mr Mnuchin is heading the United States delegation along with trade representative Robert Lighter and the pair are expected to meet China's vice premier Liu He in Beijing tomorrow and Friday.
A meeting between Lighthizer and Chinese President Xi Jinping is being tentatively scheduled for this week.
Countering that, Hu Xijin, the editor-in-chief of China's nationalist Global Times tabloid, tweeted that speculation on an extension was "inaccurate", citing a source close to talks.
Negotiators have said any final agreement will have to be made by Mr. Trump and his Chinese counterpart, Xi Jinping.
Chinese officials also are balking at US pressure to accept an enforcement mechanism to monitor whether Beijing carries out its promises, said Kuijs.
Negotiations this week are focused on how to enforce the trade deal and putting on paper a framework agreement to present to the two presidents.
China has offered to buy more U.S. goods but is expected to resist making deeper changes to its economy. Specifically, Lighthizer has zeroed in on China's alleged abuses of intellectual property and state sponsorship of companies.
USA and Chinese negotiators are meeting this week for their final trade talks before President Donald Trump decides whether to escalate a dispute over technology with a March 2 tariff hike on $200 billion of imports from China. The goal of "reciprocal trade" has been a clear priority of Trump's policies.
This week, Beijing wants "to see the threat of additional tariff imposition being removed for as long as possible", with minimal conditions attached, said Louis Kuijs of Oxford Economics. To get the U.S.to do that, negotiators are trying to focus attention on their efforts to reduce China's more than $300 billion goods trade surplus. While down from the record peak late previous year, China still had a $27.3 billion trade surplus in goods with the U.S.in January, according to data released on Thursday in Beijing.