NEW YORK (Reuters) - Investors are bracing for a looming hit to U.S. corporate profits and pressure on inflation after President Donald Trump on Saturday signed an executive order imposing tariffs on its largest trading partners, with markets seen as not having fully factored in risks from higher levies on foreign imports.

The president's executive order imposes a 25% tariff on goods entering the country from Mexico and Canada and 10% on imports from China, with what the White House described as "tentative plans" for these to come into effect on Tuesday at 12:01 a.m. ET.

On Friday, Trump said nothing could be done by the three countries to forestall the tariffs, although he did raise the prospect of exempting oil from Canada. The tariffs include a 10% levy on all Canadian energy supplies imported by the United States.

"I do think the markets are going to react to this," said Mark Malek, chief investment officer at Siebert Financial in New York. "Until now the market has really been on Trump's side, but that could change and the market could challenge him for the first time."

As rumors of the details leaked out on Saturday afternoon, some investors still clung to hopes that the process might just be brinkmanship by the White House and that until the tariffs begin to be levied on importers, there is room for the president to walk back his plan.

"With any delay in implementation, there will be some view that this is still a negotiating ploy," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

Following his inauguration, Trump set a Saturday deadline for imposing tariffs unless Mexico and Canada moved to halt flows of illegal immigrants and the deadly opioid fentanyl into the United States.

Barclays strategists previously estimated that the tariffs could create a 2.8% drag on S&P 500 company earnings, including the projected fallout from retaliatory measures from the targeted countries.

The executive order includes a provision for Trump to increase the size and scope of the tariffs if countries affected seek to retaliate.

Goldman Sachs economists have estimated that across-the-board tariffs on Canada and Mexico would imply a 0.7% increase in core inflation and a 0.4% hit to gross domestic product.

The potential to drive up consumer prices is a particularly sensitive area for investors, who are worried about a revival in inflation causing the Federal Reserve to stop cutting interest rates. The U.S. central bank last week paused its rate-cutting cycle, while Fed Chair Jerome Powell said officials were "waiting to see what policies are enacted" with the new president.

Investors widely expect some kind of selloff in stocks and other higher-risk assets when markets reopen on Monday. Gene Goldman, chief investment officer at Cetera Financial Group, said the combination of high valuations, the impact of tariffs on inflation and the effects on Federal Reserve policy would contribute to declines.

With the S&P 500 near all-time highs, the index could move 3% to 5% in either direction in the short term, Evercore ISI strategists said in a note.

"This is one of these big geopolitical events that you can't predict," said Colin Graham, head of multi-asset strategies at Robeco in London, ahead of Saturday's developments. "They just happen and you have to figure out afterwards what you're going to do."