Bloomberg, citing "three people familiar with the matter", reported that the administration was planning to announce tariffs covering all remaining Chinese imports if talks between Trump and Xi failed to "ease the trade war".
Already, about $250 billion of Chinese goods imported to the USA are subject to tariffs.
The US this year has already imposed tariffs on $250 billion in trade with China.
No decision has been made but preparation for new tariff list are on, in case the meeting does not yield progress towards solving disputes.
Although most tech firms fell Monday, open-source software company Red Hat soared 45.4% to $169.63 - reversing its losses from earlier this year - after IBM agreed to buy it for $34 billion in stock. Each side has now imposed charges on half of the other side's annual exports and Washington has threatened to slap tariffs on all Chinese sales to the U.S.
Early trading was a reflex reaction as investors bought into last week's weakness, said Craig Fehr, Canadian markets strategist for Edward Jones.
The Nasdaq composite sank 116.92 points, or 1.6 percent, to 7,050.29.
NAB's Mark Todd said he doesn't see China or United States backing down.More news: Driver accused of killing 3 children, injuring 1 is facing homicide charges
The trade spat between Washington and Beijing escalated in April after the United States slapped 25- and 10-percent tariffs on steel and aluminum imports, respectively, from China.
The pan-European STOXX 600 index lost 0.14 per cent.
The Dow is down 276.30 points, or 1.1 percent.
The Dow was up more than 350 points earlier in the day before swinging more than 900 points and closing 9 percent below its all time high.
A spokeswoman for the US Trade Representative's office referred Reuters to Sanders' statement, while US Commerce Department officials did not immediately respond to requests for comment. The euro rose to $1.1377 from $1.1372. Brent crude, used to price worldwide oils, fell 0.4% to $77.34 a barrel in London.
The yield on the 10-year Treasury note rose to 3.08 percent from 3.07 percent.The price of USA crude oil dropped 0.8 percent to $67.04 per barrel in NY while Brent crude, used to price global oils, lost 0.4 percent to $77.34 per barrel in London.Wholesale gasoline added 0.5 percent to $1.82 a gallon and heating oil slid 0.8 percent to $2.28 a gallon. Any reminders of that just leads to more pessimism.
USA crude fell 1.28 percent to $66.18 per barrel and Brent was last at $76.07, down 1.64 percent. Copper was little changed at $2.74 a pound.The dollar rose to 112.35 yen from 111.85 yen.