Trump told reporters that he brought up the case in talks with Xi during his two-day state visit to Beijing last week.
"He was terrific, and they're working on it right now. And hopefully everything is going to work out," Trump told reporters in the Philippines aboard Air Force One at the conclusion of his five-nation tour of Asia.
"But that was not a good subject. That was not something that should have happened," Trump added, calling it a "very, very rough situation with what happened to them," providing no details.
ESPN reported that they were nabbed on suspicion of stealing from a Louis Vuitton store and later freed on bail but ordered to remain in Hangzhou.
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The US sports network, which had a reporter travelling with the teams, quoted sources saying authorities had surveillance footage of the alleged crimes.
"What they did was unfortunate. You know, you're talking about very long prison sentences. They (Chinese authorities) do not play games," Trump said.
But the likelihood of China throwing the book at the trio was probably low with the leaders of the world's two biggest economies keen to make nice for the state visit.
Asked whether the players would soon be coming home, Trump said: "I hope so. I hope so."
The UCLA and Georgia Tech squads were in Hangzhou for a side trip to the headquarters of Chinese e-commerce giant Alibaba.
UCLA won Saturday's game in Shanghai 63-60 without the three players. The rest of the team flew home afterwards.
Xi promised to look into the case and ensure the players are treated fairly and expeditiously, the paper quoted an official saying.
Kelly remains in touch with the player's families and with Chinese authorities, adding that charges against the players had been reduced and the case was proceeding toward a resolution, the Post reported.
The US and Chinese governments have declined to release any information on the players' whereabouts and status, probably due to the diplomatic sensitivities.