The dispute intensified after Washington imposed visa restrictions on Chinese officials over the mistreatment of Muslim minorities, a day from the Commerce Department blacklisting various Chinese companies for the same reason.
Thursday's meetings, the first ministerial-level meeting in months, is being monitored for signs of respite from a tariff war that has deeply damaged global economic growth.
"The movement is definitely reactionary given that there is little expectations of a deal now, and we will also have to look out for Chinese retaliation," said Joel Ng, an analyst with KGI Securities.
Philippine shares <.PSI> dropped 1%, reversing strong gains from the day before, as the country's central bank governor said further rate cuts this year are unlikely.
Index heavyweights SM Prime Holdings and SM Investments Corp fell 1.7% and 1.9% respectively.
Singapore's benchmark index <.STI> snapped two sessions of gains to fall, weighed down by banking and industrial shares.
Southeast Asia's largest bank, DBS Group Holdings, lost 0.7%, while conglomerate Jardine Matheson Holdings was trading 2% down.
Malaysian stocks <.KLSE> closed at their lowest in over four years, hurt by losses in the banking and consumer sectors.
Malayan Banking fell 0.8%, while palm oil producer Sime Darby Plantation dropped 1%.
Bucking the general trend, Thai stocks rose, helped by gains in the utility sector, with electricity distributor Global Power Synergy rising 5%.
(Reporting by Soumyajit Saha in Bengaluru; Editing by Mark Heinrich)
By Soumyajit Saha
