South Korean stocks failed to hold onto early gains, with the Kospi closing lower by 0.32 percent at 2,265.46, while in Australia, the S&P/ASX 200 edged down by 0.43 percent to end at 6,183.40 as most sectors closed lower.

In Japan, the declined 0.31 percent, or 68.50 points, to close at 21,717.04, notching a third consecutive session of declines. The electric appliances sector was among the worst performing, sliding 1.9 percent by the end of the day. Semiconductor industry plays also sank, with Tokyo Electron down 4.44 percent, while utilities and mining names gained.

Asian stocks closed in negative territory on Wednesday, with China markets failing to sustain gains notched in the last session as trade jitters continued to simmer ahead of a deadline when tariffs are due to take effect.

Meanwhile, Hong Kong's fell 1.08 percent by 3:13 p.m. HK/SIN, extending the previous session's losses, with the heaviest declines seen in the energy and real estate sectors.

On the mainland, the tracked lower once again, falling 0.94 percent to close at 2,760.59 after recording late gains in the previous trading session. The smaller Shenzhen composite suffered a heavier drop, closing down by 1.96 percent.

Elsewhere, Malaysian investors kept an eye on the arrest of former prime minister Najib Razak amid investigations into 1Malaysia Development Berhad. The former premier was charged with three counts of criminal breach of trust on Wednesday, Reuters said. Malaysia's KLCI traded higher by 0.41 percent by 3:15 p.m. HK/SIN.

MSCI's index of shares in Asia Pacific excluding Japan turned lower, declining 0.32 percent during Asia afternoon trade.

Investor concerns over trade have intensified this week as they await U.S. tariffs on $34 billion in Chinese products, which are set to kick in on Friday. The Chinese government has announced duties of its own that will target the same value of U.S. goods.

Apart from China, the U.S. is also engaged in disputes with several other trading partners, including Canada, Mexico and the European Union. The countries have either begun imposing or are due to start implementing duties on U.S. goods after being on the receiving end of the Trump administration's decision to slap tariffs on steel and aluminum imports.

Investor sentiment has been wobbly amid uncertainty surrounding U.S. trade policy in the lead up to the July 6 deadline, with both the Shanghai composite and Shenzhen composite in bear market territory, referring to losses of at least 20 percent from 52-week highs.

"I wouldn't expect any kind of dramatic recovery [for China markets], but I would expect some fluctuations around the current level ... I think though, what we've seen with the stock market in China has reflected more an economic slowdown than fears about trade wars," Kristina Hooper, chief global market strategist at Invesco, told CNBC's "Squawk Box." She added that Chinese stocks could be pressured lower if the trade dispute worsens.

Major U.S. indexes finished the shortened Tuesday session, which came a day before the Fourth of July holiday, in negative territory. The Dow Jones Industrial Average shed 0.54 percent and the tech-heavy Nasdaq dropped 0.86 percent.

Technology underperformed stateside, with semiconductors leading the move lower. Idaho-based semiconductor maker Micron finished the session down 5.5 percent after dropping as much as 8 percent. Those moves came as a Chinese court temporarily prohibited the sale of Micron chips in the local market, Bloomberg reported, citing a statement from Taiwan's United Microelectronics.

"Further news from the Chinese side and in the U.S. suggest that the trade issue remains unresolved, with the atmospherics remaining testy," David de Garis, director of economics at National Australia Bank, said in a note.

The yuan, meanwhile, stabilized after a recent bout of weakness, which overnight saw the currency touch its lowest levels against the dollar in around 11 months. Weakness in the currency seen from the middle of last month came amid worries that the trade spat between the U.S. and China could spiral into a trade war with more serious consequences.

The yuan traded at 6.6035 to the dollar at 3:09 p.m. HK/SIN, around 0.5 percent firmer than the last close. China's central bank had sought to calm markets on Tuesday, with People's Bank of China Governor Yi Gang stating that the bank would keep the yuan at a reasonable level.

Meanwhile, the dollar softened after its recent gains. Against the yen, the dollar traded at 110.35 at 3:10 p.m. HK/SIN.

In individual movers, shares of ZTE fell 2.03 percent in Hong Kong by 3:10 p.m. HK/SIN after rising more than 7 percent on Tuesday. The company, which has faced U.S. sanctions since April, is getting some relief from the U.S. government, which authorized the telecommunications equipment maker to carry out limited business. Shenzhen shares rose 2.6 percent by the end of the day.