EMERGING MARKETS-Most currencies, stocks fall as Trump's tariffs take effect

By Shashwat Chauhan

March 4 (Reuters) - Most emerging market stocks and currencies fell on Tuesday, as investors held back from risk-taking after U.S. President Donald Trump's new trade levies on Mexico, Canada and China took effect, launching new global trade conflicts.

Trump's new 25% tariffs on imports from Mexico and Canada took effect at 12:01 a.m. EST (0501 GMT), along with a doubling of duties on Chinese goods to 20%.

Mexico's peso MXN=, which trades around the clock, hit a one-month low and was last down 0.9% to 20.8 per dollar.

"The MXN movement hinges on the duration and final magnitude of the tariffs. If sustained at 25%, the MXN could exceed MXN 21, having already weakened significantly since mid-2024," Societe Generale analysts said.

Implied volatility options to buy or sell Mexican pesos overnight MXNONO=FN were trading at 15.9 vols, their highest in about a month.

Canada and Mexico, which have enjoyed a virtually tariff-free trading relationship with the U.S. for three decades, were poised to immediately retaliate against their longtime ally.

China responded immediately after the deadline, announcing additional tariffs of 10%-15% on certain U.S. imports from March 10 and a series of new export restrictions for designated U.S. entities.

The onshore yuan CNY=CFXS held steady, aided by the central bank continuing a strengthening bias in its daily official guidance.

Equities in Taiwan .TWII and Hong Kong .HSI fell, also tracking Wall Street's heavy losses overnight, with the S&P 500 .SPX seeing its worst single-day drop of the year.

In Europe, Ukraine's international bonds remained under pressure after a White House official said Trump has paused military aid to Ukraine following his clash with Ukrainian President Volodymyr Zelenskiy last week.

The 2035 maturity XS2895057177=TE - one of the bonds where future payments are linked to economic performance - saw the biggest decline, down 1.7 cents to be bid at 59.5 cents on the dollar, its lowest in over a month, Tradeweb data showed.

Equities in Central Eastern Europe (CEE), which have rallied of late amid the growing speculation of a Russia-Ukraine peace deal, sold off early on.

Stocks in Warsaw .WIG20 shed 2.4%, while shares in Prague .PX and Hungary .BUX fell about 1% each.

CEE currencies were broadly flat against the euro in the lead up to a likely interest rate cut by European Central Bank (ECB) later this week.

South Africa's rand ZAR=D3 was flat at 18.6 per dollar after data showed the economy expanded 0.6% in the fourth quarter of last year in seasonally-adjusted quarter-on-quarter terms.

Global markets will also track U.S. jobs data due on Friday on growing concerns of the American economy's health, with traders ramping up bets of greater monetary policy easing by the Federal Reserve this year.

MSCI's broad gauge for EM stocks .MSCIEF lost 0.4%, pinned near its lowest level in a month, while an index for currencies .MIEM00000CUS edged 0.1% higher.

HIGHLIGHTS:

** Evidence suggests Trump's cheap yuan comment is unfounded

** Investors say it's time to take Trump seriously as markets recoil

** Sri Lanka should avoid tax exemptions, focus on passing budget, IMF says

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For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB