Close to doing deal with China but I don't know I want to do it, says Trump ahead of meeting with Xi

US President Donald Trump said Thursday a trade deal with Beijing was "close" but added he might prefer not to reach one, cooling hopes for a breakthrough at a summit this week.

Trump and Chinese President Xi Jinping are due to meet during the Group of 20 summit in Argentina, which begins Friday.

"I think we are very close to doing something with China but I don't know that I want to do it," Trump told reporters at the White House before departing for Buenos Aires.

Trump has slapped punishing tariffs on more than $250 billion in Chinese imports so far this year, demanding that Beijing end allegedly unfair trade practices and reverse industrial policies criticized by other major economies.

US officials in recent days have also renewed their criticism of Beijing in advance of the Xi-Trump meeting.

Markets are hoping a deal can be reached before the end of the year, when US duty rates are due to increase significantly.

Trump on Thursday also reiterated that US tariffs were generating tax revenues: "What we have right now is billions and billions of dollars coming into the United States in the form of taxes," he said.

Economists and critics of the president's trade policies point out duties are paid by importers and thus constitute a tax on US industry and consumers that is not paid by China.

Trump also said he believed Beijing was hoping to strike a deal.

"I think China wants to make a deal. I am open to making a deal but frankly I like the deal that we have right now," he said.

Wall Street extended early losses following Trump's remarks, with the Dow Jones Industrial Average 0.6 per cent lower shortly after 1600 GMT.