slipped 0.4%, while the Shanghai Composite Index barely changed.

** In Hong Kong, the benchmark Hang Seng was down 0.1%.

** Although China is not at risk of imminent higher tariffs, thanks to the trade truce with the U.S., sentiment was still largely subdued as U.S. President Donald Trump's policy swings left investors on edge.

** Trump warned on Sunday that the U.S. will impose an additional 10% tariff on any countries aligning themselves with what he called the "Anti-American policies" of the BRICS group of developing nations.

** He also said that the U.S. is now close to finalizing several trade agreements and will notify other countries of higher tariff rates by July 9, with the higher rates set to take effect on August 1. ** "Markets are set to see more volatility from here" and are unlikely to see a sustained uptrend with the expiring tariff deadline and trade policy uncertainties impacting risk appetite, analysts at Huatai Securities said in a note. ** Leading the onshore markets' losses on Monday, the AI sector declined 1.1%, the energy sector slid 1.8% while the liquor distillers index weakened 0.8%.

** The medical services sector weakened 0.7% after China's finance ministry said on Sunday it was restricting government purchases of medical devices from the European Union in retaliation for Brussels' own curbs last month.

** Helping offset the losses, Chinese property developers listed in mainland and Hong Kong, climbed by 1.4% and 0.9%, respectively, after the housing regulator vowed to put a floor on dropping home prices.

** Traders are also watching for China's key inflation data due out on Wednesday to gauge the health of the world's second-largest economy in the face of persistent deflation pressure and trade risks.