The S&P/ASX 200 index slipped 0.3% or 19.6 points to 6,696.5 at the close. The benchmark ended the week 0.8% lower, its biggest weekly drop since May.

U.S. President Donald Trump said on Thursday that China was not living up to promises it made on buying agricultural products from American farmers.

"Post G20, people were hoping that the trade war situation had gone away. But it does feel like if Trump starts his tweeting storms again, there is risk to the downside," Damian Rooney, director of equity sales at Argonaut said.

Trump and Chinese President Xi Jinping agreed at a G20 meeting in late June on a trade ceasefire to open the door for a resumption of negotiations, but existing tariffs remain in place and the two sides are believed to be still far apart on some key issues.

Losses among Australian shares on Friday were concentrated in mining stocks, whose dependence on China makes them vulnerable to any weakness in the world's second largest economy.

BHP Group Ltd and its rival Rio Tinto Ltd slid 0.6% and 0.9% respectively.

Caution also prevailed ahead of release of China June trade data, which is widely expected to show a fall in exports on weakening global demand and a sharp hike in U.S. tariffs.

Gold miners also declined sharply, having their worst day since July 1.

St Barbara Ltd fell 2.8%, its sharpest drop in more than one-month.

Oil Search Ltd climbed 3.5% to its highest since May 23 and was the best performer on the benchmark.

On Friday, The Australian newspaper reported that Santos  could be considering acquiring its $7.6 billion rival Oil Search.

Santos said it does not comment on market speculation.

New Zealand's benchmark S&P/NZX 50 index gained 0.1% or 14.11 points to finish at 10,701.43. The index notched a weekly gain of 0.8%, extending a winning run to a fifth consecutive week

Healthcare stocks led the gains, with Fisher & Paykel Healthcare Corporation Ltd firming 0.6%.