Treasury Secretary Steven Mnuchin declared the trade war "on hold" after China had agreed to step up its purchases of USA goods, especially in agriculture and energy, and narrow America's huge trade deficit with China.
Donald Trump was scheduled to meet with Chinese Vice Premier Liu He at the White House as talks conclude on Thursday.
But he said China wanted to strike a deal to avoid an increase in tariffs.
On Monday, China's biggest technology company, Huawei, was indicted on USA charges including technology theft. "Those are separate issues", Treasury Secretary Steve Mnuchin told United States media ahead of the talks.
"I don't know", Lighthizer said, though he stressed he rarely expresses either optimism or pessimism about such talks. 'We're miles and miles from getting a resolution'.
A Chinese delegation is in Washington this week to discuss the broad strokes of an agreement to end the trade war the two countries have fighting for almost a year. The White House did not immediately comment on the report or say when the meeting would take place.
What is the fight about?
Trump took a tough stance with China past year to end Beijing's decades-long protectionist and trade-distorting practices, by imposing tariffs and investment restrictions.
To stop an escalating trade war, both sides declared a 90-day halt on tariffs on December 1, 2018, at the end of a bilateral meeting on the sidelines of the G-20 summit in Argentina.
Lighthizer said there was much work to do to reach an agreement, but cited "substantial progress" in talks that focused on issues such as protecting American intellectual property, forced technology transfers, agriculture and "enforcement, enforcement, enforcement".
It has also accused the government of supporting technology theft as part of its broader development strategy.
The US imposed tariffs on $250bn worth of Chinese goods a year ago.
Meanwhile, earnings warnings from USA companies hit by the slowdown in China's economy - due in part to the tariffs - are piling up.
That has generated pressure for a deal, but it remains uncertain if the two sides will be able to overcome their differences.
Trump has set a March 1 deadline for increasing tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent.
"Unfortunately, as was true for China's previous notifications, China's most recent notification suffers from both severe under-reporting of important programs and significant over-reporting of irrelevant or minor programs". And at times, Mr Trump has seemed eager to assure the public that an agreement remains within reach.
"Meetings are going well with good intent and spirit on both sides", Trump wrote. Critics dismissed Beijing's commitments as vague, and Trump backed away from Mnuchin's deal and made a decision to proceed with tariffs.
But he could also hope to shore up his base with protectionism. They were joined by Chinese diplomats and Trump administration officials including Secretary of Treasury Steven Mnuchin, Commerce Secretary Wilbur Ross, trade adviser Peter Navarro and economic adviser Larry Kudlow.