Asian markets suffered steep losses Monday, tracking a selloff in New York after Donald Trump sparked fears of a renewed trade war with China over its role in the coronavirus pandemic.

Claims by the US president and Secretary of State Mike Pompeo that the disease started in a lab in Wuhan, and that those responsible would be held to account, overshadowed a further slowing of infections and deaths from COVID-19.

The losses across the region come as investors returned from an extended weekend break and after all three main indexes on Wall Street tanked between 2.6 and 3.2 percent, having enjoyed their best month in decades in April.

Trump suggested he could lump new tariffs on China over its handling of the virus outbreak, claiming he had seen evidence linking a Wuhan lab to the contagion.

The warning fanned worries of a return to the trade standoff between the world's top two economies that battered global markets last year until a partial agreement was reached in December.

It also comes as Trump faces a tough fight to be re-elected in November with the economy tanking and millions of Americans losing their jobs because of the virus crisis.

"President Trump is back beating the trade war drums... and increasing the odds of a significant volatility risk event as all roads lead back to trade and tariff," said AxiCorp's Stephen Innes.

He added that "while the market is already factoring in a less globalised world during the initial phase of the post-pandemic recovery as economies internalise, rekindling a dormant US-China trade war will likely make any economic improvement exponentially more difficult. And ripping up the trade agreement will trigger a global equity market rout."

- 'Challenges and setbacks' -

Hong Kong led the selloff, dropping more than three percent, while Seoul, Taipei, Singapore, Manila and Jakarta were all down more than two percent, with Wellington off 0.7 percent. However, Sydney edged up slightly.

Analysts warned that after a strong April -- fuelled by optimism the worst of the disease has passed -- equities could suffer a tumultuous May as corporate earnings and other indicators reveal the extent of the damage inflicted.

"My concern is that the market has priced in all that optimism before we have confronted the worst of the bad news on the economy and on some industries and earnings," Michael Jones at Caravel Concepts LLC told Bloomberg TV.

"There are some challenges and setbacks that are going to be hitting us in the face over the next four weeks and we are no longer priced cheaply enough to just look past all that bad news."

The downbeat mood sent the dollar rallying against higher-yielding, riskier currencies including the Australian dollar, South Korean won and Mexican peso.

Oil prices dropped after surging last week as top producers began to ease up on the pumps as part of a deal agreed last month to slash output by 10 million barrels a day.

- Key figures around 0230 GMT -

Hong Kong - Hang Seng: DOWN 3.6 percent at 23,747.20

Shanghai - Composite: Closed for a holiday

Tokyo - Nikkei 225: Closed for a holiday

West Texas Intermediate: DOWN 7.4 percent at $18.31 per barrel

Brent North Sea crude: DOWN 2.7 at $25.73 per barrel

Euro/dollar: DOWN at $1.0955 from $1.0978 at 2040 GMT

Dollar/yen: DOWN at 106.76 yen from 106.93 yen

Pound/dollar: DOWN at $1.2462 from $1.2494

Euro/pound: UP at 87.91 pence from 87.86 pence

New York - Dow: DOWN 2.6 percent at 23,723.69 (close)

London - FTSE 100: DOWN 2.3 percent at 5,763.06 (close)

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