Oil prices extended their gains as the USA pushed other countries to cut oil imports from Iran.
Nevertheless, trade-sensitive assets including currencies continue to feel the heat - the Australian dollar weakened towards one-year lows hit recently and the New Zealand dollar touched seven month lows to the USA dollar.
China should take "self defence measures" against USA tariffs by offering subsidies to companies and industries that may suffer losses from trade frictions, the Global Times said on Wednesday.
"Such legislation will provide additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity", Trump said in a statement. Hong Kong's Hang Seng rose 0.4 percent to 28,469.94 and the Shanghai Composite in mainland China gained 0.3 percent to 2,821.15.
But that rally has fizzled. Dow futures were down 0.1 percent and S&P 500 futures dipped 0.2 percent.
Meanwhile, Beijing continues to highlight the benefits of trade with China in an effort to avert pressure to change development tactics.
"Nothing today came out other than commentary from the administration", said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
Germany's DAX was flat at 12,270 and France's CAC 40 added 0.3 percent to 5,298. Japan's Nikkei 225 fell 0.3 percent to 22,271.77 and South Korea's Kospi dropped 0.4 percent to 2,342.03.
Chinese equities have now fallen into so-called bear market territory, having tumbled 20 percent from recent peaks.
Trump's latest plans to screen foreign investments led some safe-haven investments lower.
Gold prices slipped to a six-month as the dollar strengthened, making bullion more expensive for buyers using other currencies. The Russell 2000 index picked up 0.7 percent to 1,668.53.
Currencies: The dollar fell to 109.92 yen from 110.03 yen.
The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.
ANALYST'S TAKE: "To a large extent, the Chinese market is one driven by speculation", said Jingyi Pan, a market strategist at IG in Singapore.
The trade-sensitive Australian dollar earlier fell 0.3 percent to $0.7371, edging back towards last week's 13-month low of $0.7345. US gold futures GCcv1 fell 0.34 percent to $1,255.60 an ounce.
"If all this were to happen, and US trading partners were to retaliate, it would deliver a significant supply shock to the world economy, raising inflation and lowering growth".
"For the most part, the specter of trade wars is still really weighing on risk here and that's what's keeping Treasuries better bid", said Gennadiy Goldberg, an interest rate strategist at TD Securities in NY. Taiwan's benchmark rose but Southeast Asian indexes were mixed. Trump, who withdrew the US from an Iran nuclear deal in May, is reportedly pushing foreign nations to cut their oil imports from the country to zero by November, when sanctions on Iran's energy sector will kick in again.