(Updates prices to late afternoon, adds oil settlement)

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Wall Street's main indexes all off more than 1%

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Trump's back and forth on tariffs weighs on sentiment

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US dollar down vs yen but up against euro, Swiss franc

By Sinéad Carew and Harry Robertson

NEW YORK/LONDON, March 13 (Reuters) - Global equities

and U.S. Treasury yields both fell on Thursday on worries about

global trade tensions and the potential impact on inflation and

economic growth after U.S. President Donald Trump threatened

duties of 200% on European beverage imports.

Trump said the latest in a long list of tariff threats would

be implemented if the EU does not remove U.S. whiskey

surcharges. This was after his increased tariffs on all U.S.

steel and aluminium imports took effect on Wednesday.

In contrast, Thursday's Labor Department's Bureau of Labor

Statistics data showed U.S. producer prices (PPI) were

unexpectedly unchanged in February and Wednesday's data showed

consumer prices (CPI) rising more slowly than expected.

"If it wasn't for the trade war going on, the market would

be up strongly" on the inflation data, said Tim Ghriskey, senior

portfolio strategist at Ingalls & Snyder in New York. "Traders

are focused on the trade war."

"It seems like the (U.S.) administration is being very

aggressive and promises at least at this point to be in it for

the longer term and the personalities look unlikely to back down

at least in the near term," said Ghriskey.

Bill Adams, Chief Economist for Comerica Bank wrote in

a research note that the inflation outlook depends more on

government policies such as tariffs, deportations and Department

of Government Efficiency (DOGE) moves than "the backward-looking

data releases right now."

On Wall Street, at 02:47 p.m. the Dow Jones Industrial

Average fell 399.18 points, or 0.97%, to 40,951.75. The

S&P 500 fell 51.21 points, or 0.91%, to 5,548.09 while

the Nasdaq Composite fell 231.66 points, or 1.31%, to

17,416.79.

MSCI's gauge of stocks across the globe fell

6.69 points, or 0.81%, to 824.16.

The pan-European STOXX 600 index earlier closed

down 0.15% after rising 0.81% in the previous day's session.

While the U.S. S&P 500 index is now down almost 6% for the

year, European stocks are faring better with support from

government spending plans for defence and a potential Ukraine

peace deal. Year-to-date the STOXX index is up 6.5% year to

date, despite slipping in recent weeks.

U.S. Treasury yields fell on Thursday as tumbling stocks

boosted demand for safe haven U.S. government debt with

escalating trade wars between the United States and trading

partners threatening to dent growth and boost inflation.

The yield on benchmark U.S. 10-year notes fell

3.6 basis points to 4.28%, from 4.316% late on Wednesday.

The 30-year bond yield fell 2.9 basis points to

4.6016% from 4.631% late on Wednesday.

The 2-year note yield, which typically moves in

step with interest rate expectations for the Federal Reserve,

fell 4.2 basis points to 3.953%, from 3.995% late on Wednesday.

In currencies, the U.S. dollar was a mixed bag, weakening

against Japan's safe haven yen but gaining on the euro and the

Canadian dollar.

Against the dollar, the euro was down 0.28% at

$1.0855 but against the Japanese yen, the dollar weakened

0.34% to 147.74.

The Canadian dollar weakened 0.39% versus the

greenback to C$1.44 per dollar. Sterling weakened 0.06%

to $1.2952.

After rallying on Wednesday on a larger-than-expected draw

in U.S. gasoline stocks, oil prices slipped on Thursday as

traders weighed macroeconomic concerns and demand versus supply

expectations.

U.S. crude settled down 1.67%, or $1.13 at $66.55 a

barrel and Brent settled at $69.88 per barrel, down

1.51% or $1.07 on the day.

Gold prices raced to a record high within touching distance

of the key milestone of $3,000 per ounce on Thursday, with

momentum driven by elevated tariff uncertainty and bets on

monetary policy easing by the U.S. Federal Reserve.

Spot gold rose 1.71% to $2,981.92 an ounce. U.S. gold

futures rose 1.51% to $2,983.50 an ounce.