Shares have fallen by more than 1.0 per cent in early trade on the Australian market, and health stocks have slumped the most.
The S&P/ASX200 benchmark index was lower by 62.9 points, or 1.09 per cent, at 5717.1 points after the first 15 minutes of trade on Wednesday.
The All Ordinaries index was 65.8 points, or 1.12 per cent lower, at 5824.1.
The fall comes after reports the Trump administration is weighing economic sanctions on Chinese officials, businesses and financial institutions.
Trump has said he is preparing to take action against China this week over its effort to impose national security laws on Hong Kong but has not given details.
Health stocks on the ASX spiralled down by 3.32 per cent.
Market heavyweight CSL had a fall of 4.07 per cent.
The materials sector was down 2.58 per cent and information technology dropped 2.55 per cent.
The big miners – BHP, Rio and Fortescue – had losses.
The financial sector ran against the trend, higher by 1.43 per cent. National Australia Bank has more than doubled the size of its share purchase plan offer after strong demand from its retail shareholders.
NAB is raising $750 million in addition to its earlier target of $500 million for a total of $1.25 billion through the share purchase plan.
Construction data for the March quarter is due to be released on Wednesday morning.
The Australian dollar was buying 66.35 US cents at 1015 AEST, higher from 65.91 US cents at the close of trade on Tuesday.