Some Asian markets recovered in late-afternoon trade on Monday as news emerged that the United States agreed to exempt South Korea from steel tariffs.
That followed a global sell-off late last week amid fears that rising tensions between the U.S. and China could lead to a full-blown trade war. Even in morning trade on Monday, most Asian markets struggled for gains.
In Australia, the benchmark ASX 200 closed down 30.20 points, or 0.52 percent, at 5,790.50. The heavily weighted financial sector was down 0.84 percent.
Major banking stocks in the country fell — shares of ANZ declined 0.65 percent, Commonwealth Bank was down 1.09 percent and the National Australia Bank dropped 0.66 percent. Westpac shares were down 0.62 percent.
Across the Korean Strait, the Kospi climbed 20.32 points, or 0.84 percent, to 2,437.08.
Reuters reported that the U.S. agreed to exempt South Korea from steel tariffs and instead would impose a quota on steel imports. In return, South Korea said it would improve access for U.S. carmakers under the bilateral trade agreement deal known as the U.S.-Korea Free Trade Agreement.
Elsewhere, Chinese mainland markets finished mixed, with the Shanghai composite down 18.83 points, or 0.6 percent, at 3,133.92 while the Shenzhen composite rose 23.74 points, or 1.34 percent, to 1,790.35.
In Hong Kong, the Hang Seng index erased losses to climb 239.48 points, or 0.79 percent, to 30,548.77.
Beijing on Friday said it may target 128 U.S. products with an import value of $3 billion in response to President Donald Trump's executive order earlier this month that imposed broad duties on foreign aluminum and steel imports.
Trump had also announced tariff plans for up to $60 billion in Chinese imports, although China did not officially connect its Friday threats of retaliation to that White House action.
On Saturday, some of the world's top economists and business leaders at the China Development Forum in Beijing warned about the risks of a trade war between the two economic powerhouses. Nobel-prize winning economists Robert Shiller and Joseph Stiglitzpredicted pain ahead for the U.S. economy if Beijing and Washington ramp up tit-for-tat trade penalties.
Still, Michael Froman, who served as U.S. Trade Representative during President Barack Obama's second term in the White House, told CNBC that the Trump administration's concerns about China were "legitimate."