Asia markets were down on Wednesday with talks underway in Shanghai in a bid to bring an end to the bruising yearlong US-China trade war.
Washington and Beijing have so far hit each other with punitive tariffs covering more than $360 billion in two-way trade.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will conclude two-day talks with their counterparts in China's financial capital on Wednesday.
But expectations began low and have taken a further hit after US President Donald Trump launched an attack on Beijing's negotiators which also rocked Wall Street traders on Tuesday.
"My team is negotiating with them now, but they always change the deal in the end to their benefit," Trump tweeted.
Analysts said Trump's remarks will do little to ease the already tense relationship between Washington and Beijing.
His tweets gave "a stark reminder to investors that the US and China are no closer to an agreement and in fact, might be drifting farther apart," said VM Markets Singapore managing partner Stephen Innes.
Trade row fallout
In other signs of fallout from the trade row , China saw its third straight month of contraction in the manufacturing sector, despite Beijing's efforts to shore up the sector with tax cuts and better financing for small-to-medium enterprises.
The Purchasing Managers' Index (PMI), a gauge of Chinese factory conditions, came in at 49.7 for the month, slightly above Bloomberg forecasts but below the 50.0 mark denoting positive growth.
Shanghai was down 0.8 percent while Hong Kong fell 1.4 percent, after the financial hub's leader Carrie Lam signalled a second quarter of slow growth ahead of official GDP figures on Wednesday.
There was "no room for optimism for the second quarter and the entire year", Lam said in a statement to business leaders Tuesday.
The trade dispute with Washington has weighed on the city as it reels from seven weeks of civil unrest and mass protests – some of which have ended in violence – triggered by a controversial bill which would have allowed extraditions to mainland China.
Korean stocks were battered in morning trade with Seoul down more than 1.0 percent after Samsung Electronics reported a 53 percent drop in net profits.
The world's biggest smartphone and m emory chip maker is facing headwinds as a result of a simmering dispute between South Korea and Japan, which has seen Tokyo impose restrictions on chemical exports crucial to Samsung's key products.
Tokyo's benchmark Nikkei was down by 1.0 percent overall but entertainment giant Sony soared 6.5 percent after the entertainment giant on Tuesday reported higher operating profit for the first quarter thanks to strong demand for its image sensors.
Elsewhere, Sydney was down 0.2 percent, Taiwan fell 0.5 percent and Mumbai dropped 0.8 percent.
Key figures around 0250 GMT
Tokyo - Nikkei 225: DOWN 1.0 percent at 21,497.99
Hong Kong - Hang Seng: DOWN 1.4 percent at 27,760.25
Shanghai - Composite: DOWN 0.8 percent at 2,928.53
Pound/dollar: UP at $1.2153 from $1.2151 at 2040 GMT
Euro/pound: UP at 91.78 pence from 91.51 pence
Euro/dollar: UP at $1.1154 from $1.1142
Dollar/yen: DOWN at 108.55 yen from 108.77 yen
Brent North Sea crude: UP 47 cents at $65.19 per barrel
West Texas Intermediate: UP 38 cents at $58.43 per barrel
New York - Dow: DOWN 0.1 percent at 27,198.02 (close)
London - FTSE 100: DOWN 0.5 percent at 7,646.77 (close)