U.S. markets were closed Thursday for the Thanksgiving holiday and will have a half-day session on Friday.
Britain's FTSE 100 dropped 0.5% to 7,377.46 while the CAC 40 in Paris shed 0.3% to 5,895.48. Germany's DAX skidded 0.5% to 13,184.47. U.S. futures also were lower, with the contract for the Dow Jones Industrial Average falling 0.4% to 28,049.00. The future for the S&P 500 also lost 0.4%, to 3,142.70.
Stock benchmarks have fallen since President Donald Trump signed legislation supporting human rights in Hong Kong, potentially increasing tensions as the U.S. and China negotiate over ending their trade war.
New U.S. tariffs are set to kick in on many Chinese-made products as of Dec. 15. Negotiators have said they might soon have a preliminary deal that could avert that.
Beijing reacted with fury but no specific retaliatory measures Thursday to Trump's decision. Since the bills got nearly unanimous approval by both houses of Congress his decision was not unexpected.
China has stayed silent on the issue of whether the U.S. move, viewed as meddling in internal Chinese affairs, might derail the trade talks.
In Asian trading Friday, Japan's Nikkei 225 index lost 0.5% to 23,293.91, while the Hang Seng in Hong Kong sank 2.0% to 26,335.06. The Shanghai Composite index shed 0.6% to 2,871.98 and Australia's S&P ASX 200 gave up 0.3% to 6,846.00. South Korea's Kospi slipped 1.5% to 2,087.96. Shares also fell in Taiwan and Southeast Asia.
Japan reported Friday that its factory output fell 4.2% in October, much worse than forecast and the biggest month-on-month drop since January 2018. The decline could mean industrial production will decline by 4% in the October-December quarter from the previous quarter, Tom Learmouth of Capital Economics said in a commentary.
He noted that forecasts by manufacturers do not suggest output is likely to rebound soon.
Neighboring South Korea reported its industrial output declined 1.7% in October.
"It suggests the U.S.-China trade dispute continues taking its toll on Asian economies, despite signs of some green shoots," Jeffrey Halley of OANDA said in a report.
In energy trading, benchmark crude oil lost 1 cent to $58.10 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude oil, the international standard, gave up 12 cents to $63.15 per barrel.