I have a 2018 Mac mini which has the same USB and Thunderbolt 3 capabilities as your Mac. I also have a Thunderbolt 3 [Samsung X5][1] SSD and a 10 Gb/s USB [Samsung T7][2] SSD. I will base my answers on what I know about this hardware.
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When the Thunderbolt 3 Samsung X5 is connected to the Mac through a USB Type-C receptacle (jack), System Information displays the following under NVMExpress.
[![NVMExpress][3]][3]
Like the internal drive, the Thunderbolt 3 Samsung X5 appears as a NVMExpress drive, except the drive is external. Note that [TRIM][4] is supported.
System Information also displays the following under Thunderbolt.
[![Thunderbolt 3][5]][5]
Since the speed shows up to 40 Gb/s, one can conclude the read speed of 22.4 Gb/s is not limited by Thunderbolt 3, but rather by the NVMe drive inside the Samsung X5.
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When the USB Samsung T7 is connected to the Mac through a USB Type-C receptacle, System Information displays the following under USB.
[![Type-C][6]][6]
The data transfer speed is unto 10 Gb/s. This is the maximum speed for USB devices connected a USB Type-C receptacle on both of our Macs. There is no indication of [TRIM][4] support, which may not be necessary if the embedded PCIe NVMe technology is sufficiently fast.
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When the USB Samsung T7 is plugged in a USB Type-A receptacle on the Mac, System Information displays the following under USB.
>Note: The USB Samsung T7 comes a cable for plugging into a USB Type-C receptacle and a different cable for plugging into a USB Type-A receptacle.
[![Type-A][7]][7]
The data transfer speed is unto 5 Gb/s. This is the maximum speed for USB devices connected a USB Type-A receptacle on both of our Macs. Again, there is no indication of [TRIM][4] support.
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Conclusions
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You post contains the following four questions.
- What is the fastest external storage supported on Intel 2020 27" iMac?
The Thunderbolt 3 Samsung X5 has a read speed of 2800 MB/s. In terms of bits per second, this would be 22.4 Gb/s, since 8 bits = 8 byte. This means the data rate between the external drive and the Mac must exceed 22.4 Gb/s, which is faster than the maximum USB data rate of 10 Gb/s offered my your Mac. From this, the following conclusion can be made.
**>Nothing that USB offers will be faster than what Thunderbolt 3 offers and also be compatible with your Mac.**
- What does the 2020 Intel iMac 27" support?
The USB Type-C receptacles support Thunderbolt 3 devices. The USB Type-C receptacles also support at least USB 2.0, 3.0 (USB 3.1 Gen 1, USB 3.2 Gen 1×1) and USB 3.1 Gen 2 (USB 3.2 Gen 2×1) devices.
The USB Type-A receptacles support at least USB 1.1, 2.0 and 3.0 (USB 3.1 Gen 1, USB 3.2 Gen 1×1) devices.
- What does that mean for data transfer speeds?
The USB Type-C receptacles offer Thunderbolt 3 speeds up 40 Gb/s and USB speeds up to 10 Gb/s.
The USB Type-A receptacles offer USB speeds up to 5 Gb/s.
- When buying an external drive what do I need to look out for to make sure it will be compatible with the fastest option?
Look for a Thunderbolt 3 SSD with high with read/write speeds (in the GB/s range). The SSD should also support [TRIM][4]. You can also look for a Thunderbolt 1 and 2 SSD, but these drives would need to be self powered and would require a [Thunderbolt 3 (USB-C) to Thunderbolt 2 Adapter][8]. However, finding a self power Thunderbolt 1 or Thunderbolt 2 SDD at a price lower than Thunderbolt 3 SSD is unlikely.
[1]: https://www.samsung.com/semiconductor/minisite/ssd/product/portable/x5/
[2]: https://www.samsung.com/semiconductor/minisite/ssd/product/portable/t7/
[3]: https://i.sstatic.net/5RrB5.png
[4]: https://en.wikipedia.org/wiki/Trim_(computing)
[5]: https://i.sstatic.net/qRAn0.png
[6]: https://i.sstatic.net/evL4n.png
[7]: https://i.sstatic.net/RtXe3.png
[8]: https://www.apple.com/shop/product/MMEL2AM/A/thunderbolt-3-usb-c-to-thunderbolt-2-adapter