The story added to skittishness across trading floors, where investors are already fretting over a number of issues including geopolitical tensions, rising US interest rates, slowing growth, Brexit and Italy´s budget standoff with the EU.
Wall Street provided another negative lead, with the S&P 500 and Dow now suffering similar selling pressure to other global markets, having held up for most of the year and even chalking up several record highs as early as this month. The New York losses also came despite more positive economic data.
In early Asian trade Hong Kong shed 0.9 per cent and Shanghai was 0.7 per cent off after Bloomberg News reported Donald Trump is planning more tariffs on China if talks with Chinese President Xi Jinping next month are unsuccessful.
It cited unnamed sources as saying a list is being drawn up for a December announcement to hit another $267 billion of goods with levies.
With $250 billion already being targeted, the move would mean all China´s shipments to the United States are taxed. Beijing has said in the past that it will retaliate against any measures, putting the world´s top two economies on course for an all-out trade war.
The row comes as Chinese growth stutters, putting pressure on the government to provide support measures such as lowering the amount of cash banks must keep in reserve and tax cuts, just as it struggles to deal with a huge debt mountain.
In other markets Singapore fell 0.5 per cent and Seoul shed 0.1 per cent while Taipei, Jakarta and Manila were also in the red.
However, Tokyo jumped 0.8 percent by the break thanks to a dip in the yen against the dollar, which lifted exporters, while Sydney edged up 0.1 per cent.
The dollar was also up against most other currencies, with the euro unable to bounce back after German Chancellor Angela Merkel said she will not seek re-election in 2021.
The announcement came after her fragile coalition government suffered heavy losses in a key regional election and a junior partner threatened to quit, which would likely spark a fresh general election.
Adding to euro weakness is Italy´s row with Brussels over its wallet-busting budget, which EU officials says breaks the bloc´s finance rules, while officials seem no closer to agreeing a deal with Britain over its exit with a deadline approaching.