Brent crude was down 42 cents, or 0.7%, at $58.83 a barrel by 0041 GMT, while U.S. oil was down 27 cents, or 0.5%, at $54.83 a barrel.
The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday - including footwear, smartwatches and flat-panel televisions - as China put new duties on U.S. crude, the latest escalation in a bruising trade war.
U.S. President Donald Trump said the sides would still meet for talks later this month.
Trump, writing on Twitter, said his goal was to reduce U.S. reliance on China and he again urged American companies to find alternate suppliers outside China.
Beijing’s levy of 5% on U.S. crude marks the first time the fuel had been targeted since the world’s two largest economies started their trade war more than a year ago.
“The trade and tariff overhang is inescapable for oil markets, so while trade uncertainties persist, it will be difficult for oil to shrug off concerns about the threat to global demand,” said Stephen Innes, APAC market strategist at AxiTrader.
Elsewhere, OPEC oil output rose in August for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by top exporter Saudi Arabia and losses caused by U.S. sanctions on Iran, a Reuters survey found.
South Korea’s exports tumbled in August for a ninth consecutive month, on sluggish demand from its biggest buyer, China, and depressed prices of computer chips globally, government data showed on Sunday.
The bleak data clouded the outlook for Asia’s fourth-largest economy as a brewing trade dispute with Japan emerged as a new risk on top of the prolonged U.S.-China trade war.
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