China's benchmark Shanghai Composite index has closed 5.6% lower after President Donald Trump said he planned to raise tariffs in a dispute with Beijing.
The threat, conveyed via Twitter, dashed expectations that the two biggest economies might forge a deal in talks this week.
U.S. futures sank ahead of Monday's market opening, with the future contract for the Dow Jones Industrial Average shedding 1.8% to 26,019.00. S&P 500 futures declined 1.7% to 2,897.00.
Elsewhere, shares fell in Paris and Frankfurt. The Shenzhen A-share index, which includes many smaller companies, tumbled 7.4% on Monday while the Hang Seng in Hong Kong dropped 2.9%.
Markets were closed in Japan and South Korea for holidays.
Chinese share benchmarks have plummeted more than 5% as threats by President Donald Trump to raise tariffs in the trade war with Beijing raised doubts over the likelihood of a deal between the two biggest economies.
The Shanghai Composite index plunged 5.8% to 2,906.33 while the Shenzhen A-share index, which includes many smaller companies, tumbled 6.2%.
In Hong Kong, the Hang Seng dropped 3.2% to 29,117.32.
Chinese government offices did not immediately respond to requests for comment on Trump's suggestion the U.S. would raise import taxes on $200 billion in Chinese products to 25% from 10% as of Friday.
The tweets followed comments by U.S. trade negotiators suggesting the two sides might reach a deal this week on their dispute over Chinese industrial policy and technology.
Shares tumbled in Asia early Monday after President Donald Trump threatened in a tweet to impose more tariffs on China.
The Shanghai Composite index sank 4.8% and the Hang Seng in Hong Kong plunged 3.5%. Markets were closed in Japan. The future contract for the Dow Jones Industrial Average fell 1.9% to 25,996.00, while that for the S&P 500 also shed 1.9%, to 2,892.00.
Trump's comments came a Chinese delegation was due to resume talks in Washington on Wednesday aimed at resolving a tariffs battle that has rattled world markets.
Apparently catching Beijing by surprise, Trump said he would raise import taxes on $200 billion in Chinese products to 25% from 10%.
The Wall Street Journal, citing unidentified sources, said China's government was considering canceling this week's talks.