WASHINGTON (REUTERS, BLOOMBERG) - US President Donald Trump said he thinks there will be "a great deal" with China on trade, but warned that he has billions of dollars worth of new tariffs ready to go if a deal isn't possible.

"I think that we will make a great deal with China and it has to be great, because they've drained our country," Mr Trump told Fox News Channel's The Ingraham Angle on Monday (Oct 29).

Mr Trump said in the interview he would like to make a deal now, but that China was not ready. He did not elaborate.

"And I have US$267 billion (S$370 billion) waiting to go if we can't make a deal," Mr Trump said.

Bloomberg news reported on Monday that Washington was preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between Trump and his counterpart Xi Jinping fail to ease the trade war, citing three people familiar with the matter.

An early-December announcement of a new product list would mean the effective date - after a 60-day public comment period - may coincide with China's Lunar New Year holiday in early February.

The list would apply to the imports from the Asian nation that aren't already covered by previous rounds of tariffs, according to two of the people.

US officials are preparing for such a scenario in case a planned Trump-Xi meeting yields no progress on the sidelines of a Group of 20 summit in Buenos Aires in November, according to two of the people, who declined to be identified to discuss internal deliberations.

They cautioned that final decisions had not been made.

The move indicates the Trump administration remains willing to escalate its trade war with China even as companies complain about the rising costs of tariffs and financial markets continue to be nervous about the global economic fallout.

Stocks erased gains partly on concern about an escalating trade war between the world's two largest economies.

The S&P 500 Index fell as much as 2.1 per cent before paring the drop and ending the day down 0.7 per cent. The Dow Jones Industrial Average closed down 1 per cent and the Nasdaq 100 Index tumbled to its lowest level since May.

White House Press Secretary Sarah Huckabee Sanders declined to give specifics when asked about the importance of the meeting.

"I'm not going to get ahead of the conversation," she said in Monday's press briefing. "You have two of the most powerful leaders in the world. I think that's consequential no matter how you look at it and we'll see what happens when they sit down."

The US this year has already imposed tariffs on US$250 billion in trade with China. Ten per cent tariffs on US$200 billion in imports that took effect in September are due to increase to 25 per cent on Jan 1.

Mr Trump has also threatened to impose tariffs on the remaining goods imports from China, which last year were worth US$505 billion.

As another option, the White House is also considering excluding trade from the meeting agenda, but it is unlikely to cancel it altogether, according to two people familiar with the matter.

"We are in the middle of a pretty nasty dispute. We're in a trade dispute - I want to use that word because it's a nice, soft word - but we're going to win," Mr Trump said on Saturday at an event in Indiana.

"You know why? 'Cause we always win."