At 9:55 a.m. ET (13:55 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 28.99 points, or 0.18%, at 16,348.05.
U.S. President Donald Trump said he would impose a 10% tariff on $300 billion of Chinese imports from Sept. 1, escalating a bruising and protracted clash between the world's two biggest economies. China said on Friday it would take countermeasures.
Seven of the TSX's 11 major sectors were in the red.
The energy sector dropped 0.5% while the materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.8%.
The heavyweight financials sector slipped 0.3% and the industrials sector saw a similar fall.
U.S. crude prices were up 3.2% a barrel, while Brent crude added 3.6%, recovering from their sharpest fall in years. [O/R]
Meanwhile, investors flocked to the safety of the bullion, sending gold futures 1.2% higher to $1,437.8 an ounce. [GOL/] [MET/L]
On the TSX, 83 issues were higher, while 143 issues declined for a 1.72-to-1 ratio to the downside, with 33.68 million shares traded.
The largest percentage gainers on the TSX were Aphria Inc, which jumped 27.5% after the cannabis producer posted better-than-expected fourth quarter revenue. The second biggest gainer was Hexo Corp, up 4.8%.
Open Text Corp fell 6.9%, the most on the TSX, after it posted fourth-quarter results.
The second biggest decliner was CannTrust Holdings Inc, down 5.6% after the marijuana producer said the Ontario Securities Commission had opened an investigation into the company.
The most heavily traded shares by volume were Aphria Inc, Aurora Cannabis and Bombardier Inc.
The TSX posted 11 new 52-week highs and seven new lows.
Across all Canadian issues there were 36 new 52-week highs and 22 new lows, with total volume of 49.97 million shares.
(Reporting by Medha Singh in Bengaluru; Editing by Shailesh Kuber)