Washington already has imposed 25 per cent tariffs on $US250 billion ($A359 billion) of Chinese goods, ranging from semi-conductors to furniture, that are imported into the US. "President Trump likes deals, so he might agree to something", noted Matthew Goodman, an economics expert at the US-based Center for Strategic and International Studies. "We should see this as a momentary pause but markets shouldn't expect there to be a deal", Kennedy said. "China, as one of the victims of multiple trade restrictions, always stands in the front line of opposing unilateralism, protectionism and bullying practices".
Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo, said the markets were fully focused on the G20 but were not optimistic.
USA stock futures jumped on his remarks.
Observers said a decisive breakthrough was possible at the talks, which are expected on Saturday, but was not the most likely scenario given the complexity of the issues.
"You've heard the President say publicly on a number of occasions that he's quite comfortable with where we are, and he's quite comfortable with any outcome of those talks", a senior administration official said Monday previewing on background President Trump's upcoming visits to Osaka for the G-20 and his side-meetings and then to Seoul.
Chinese state media have promised the country will "fight to the end" and have framed the trade war as an attempt by Washington to constrain China's development.
President Trump has said he is happy with the current situation, claiming billions of dollars are pouring into the U.S. treasury because of the higher tariffs on imports from China. "Mutual respect means each side must respect the other's sovereignty".
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Alice Ekman, head of China Research at the French Institute of International Relations, said the world should brace for a lengthy period of frosty relations as Washington and Beijing also scrap over technological domination. The meeting also takes place amid what some have called a digital cold war between the United States and China.
He will also be meeting leaders of Brazil, Russia, India, China and South Africa (BRICS) and Russia-India-China (RIC).
Meanwhile, Trump and Putin are expected to focus on regional security issues such as Iran, Ukraine and Syria, as well as arms control issues given the US withdrawal from the Intermediate-Range Nuclear Forces Treaty, a 1987 pact with Russian Federation, a third administration official said.
Observers say that even if a trade agreement or truce is reached, the era of broader US-China rivalry and tension over politics, security, human rights, and business as well as trade, is only just beginning.
Answering repeated questions from trade officials on whether the businesses can switch to suppliers outside of China or move their manufacturing to the United States, representatives said such a proposal would face many hurdles.
Ominous prospects of Middle East conflict also loom over the summit, after Iran shot down a USA drone following accusations by Washington that it had attacked two tankers in the Gulf of Oman. Trump will also meet with German Chancellor Angela Merkel, Indian Prime Minister Narendra Modi, Australian Prime Minister Scott Morrison and Japanese Prime Minister Shinzo Abe, who is hosting the summit, the official told reporters on a conference call, noting additional bilateral meetings could still be announced.