Benchmarks in Shanghai, Tokyo, Hong Kong and Sydney all declined. Oil rebounded from the previous day's losses.
Trump alarmed investors by saying he had $325 billion of Chinese imports available for additional tariffs "if we want." That shook markets that had been reassured by Trump's agreement with Chinese President Xi Jinping in June to hold off on new trade penalties while they resume negotiations.
The Chinese government warned tariff hikes would "create a new obstacle" in talks on ending their bruising fight over Beijing's technology ambitions.
Trump's comment "cast a dark cloud over lingering concerns on trade talk progress," said Mizuho bank analysts in a report.
The Shanghai Composite Index lost 0.6% to 2,913.49 and Tokyo's Nikkei 225 tumbled 1.6% to 21,128.12. Hong Kong's Hang Seng retreated 0.4% to 28,465.17 and Seoul's Kospi was 0.2% lower at 2,066.94.
Sydney's S&P-ASX 200 shed 0.3% to 6,655.60 and Taiwan and Southeast Asian markets also retreated. New Zealand gained.
On Wall Street, stocks extended their losses into a second day as railroad operator CSX had its biggest drop in 11 years, pulling other industrial companies down with it. CSX plunged 10.3% after saying it expects this year's revenue to decline as much as 2%, after previously saying it expected growth.
Banks fell as investors worried lower interest rates will hurt profits. Investors expect the Federal Reserve to cut interest rates for the first time in a decade at their next policy meeting in two weeks.
Corporate earnings reports are getting into full swing this week, and investors have been mostly cautious in their assessments of them. Earnings are still expected to decline for S&P 500 companies in the second quarter.
JAPANESE TRADE: Japan's June exports declined 6.8% from a year earlier. Imports fell 5.2%. For the first six months of this year, Japanese exports slipped 4.7% while imports edged down 1.1%.
ENERGY: Benchmark U.S. crude gained 1 cent to $56.79 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 84 cents on Wednesday to close at $56.78. Brent crude, used to price international oils, advanced 17 cents to $63.83 in London. It lost 69 cents the previous session to $63.66.
CURRENCY: The dollar declined to 107.73 yen from Wednesday's 107.97 yen. The euro gained to $1.1239 from $1.1226.
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