The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday - including footwear, smart watches and flat-panel televisions - as China started slapping new duties on U.S. crude.

Meanwhile, China's factory activity unexpectedly expanded in August as production edged higher, a private business survey showed, but this was in contrast to official data from Saturday showing manufacturing activity contracted for the fourth month in a row.

Singapore stocks <.STI> fell 0.8% with industrials accounting for most of the losses.

Index heavyweight Jardine Matheson Holdings Ltd dropped 4.1%, while subsidiary Jardine Strategic Holdings Ltd fell 3.6%.

Philippine stocks <.PSI> closed 0.8% lower, snapping three straight sessions of gains, dragged by financials and industrials.

BDO Unibank shed 2.7%, while International Container Terminal Service dropped 1.7%.

Meanwhile, Philippine nickel miners are expected to boost ore production next year when Indonesia bans exports of the raw material used in stainless steel and batteries.

Indonesia said it would stop nickel ore exports from Jan. 1, 2020, two years earlier than initially flagged as it speeds up efforts to process more of its resources at home, boosting nickel prices.

Indonesian shares <.JKSE> dropped 0.6%, weighed down by consumer stocks. Unilever Indonesia Tbk Pt and Gudang Garam Tbk Pt declined 1.8% and 4.9%, respectively.

Indonesia's consumer price index rose 3.49% in August from a year earlier to the highest since December 2017, but remained within the central bank's target range of 2.5%-4.5% for the year. Analysts polled by Reuters had forecast a rise of 3.54%.

Thai stocks closed marginally lower. Thailand's annual headline consumer price index rose 0.52% in August, below a Reuters poll forecast of an 0.85% increase.

The inflation rate stayed below the central bank's target range of 1% to 4%, sparking hopes that the Bank of Thailand may cut its policy interest rate once again after the surprise cut in August.

"We bring forward our forecast for next 25bp rate cut from the fourth quarter to the next BoT meeting on 25 September," ING said in a note.

Financial markets in Malaysia <.KLSE> and Vietnam <.VNI> were closed for holidays.

(Reporting by Shreya Mariam Job in Bengaluru; Editing by Subhranshu Sahu)

By Shreya Mariam Job