*

Dollar surges, S&P 500 futures fall as tariffs to hit on

Tuesday

*

European stocks, euro down as investors brace for next hit

*

Cryptos collapse, Asia stocks slide as traders flee from

risk

(Updates with more context in paragraphs 3-4, adds more quotes)

By Tom Westbrook

SINGAPORE, Feb 3 (Reuters) - Investors bought dollars,

sold stocks and fretted about inflation on Monday in a scramble

to assess the risk of a trade war after Donald Trump put tariffs

on top U.S. trading partners.

Trump's orders for additional levies of 25% on imports from

Mexico and most goods from Canada, as well as 10% on goods from

China are light on detail. But they kick in on Tuesday and have

jolted markets that had assumed Trump was mostly bluff and

bluster.

The selloff extended beyond just Canadian and Mexican

markets and stocks directly in the line of fire, to

cryptocurrencies, stocks and even the safe-haven Japanese yen,

as investors tried to second-guess the volatile president's next

moves.

Worries about the hit to growth from the inflationary impact

of the wide-ranging tariffs and the uncertainty that creates for

the Federal Reserve played a part, causing everything but the

dollar and long-term U.S. Treasuries to be sold.

"Trump's trade war has started," said Alvin Tan, head of

Asia currency strategy at RBC Capital Markets in Singapore,

noting it was hard to see the U.S. dollar retreating any time

soon.

The dollar has been the main mover, gaining as Trump headed

for and then won office because investors figured tariff-hit

countries would weaken their currencies to offset the impact.

On Monday, the euro fell 1.3% on fears Europe may

be next on the tariff list.

Canada's dollar skidded to a 20-year low on the

greenback, China's yuan slid in offshore trade, oil

jumped, metals slumped and U.S. equity futures dropped

about 2% on risks to U.S. companies' bottom lines.

Trump said the tariffs may cause "short term" pain for

Americans, and while he would speak on Monday with the leaders

of Canada and Mexico, which have announced retaliatory tariffs

of their own, he downplayed expectations that they would change

his mind.

He said tariffs would "definitely happen" with the European

Union, but did not say when.

"Against the backdrop of sweeping tariff threats set to

expand even more, the dollar has gained at the expense of

currencies of U.S. trade partners," Mizuho analysts wrote.

The longer-run implications for other asset classes is less

clear.

Stocks fell as analysts, such as those at Barclays, expect a

drag on U.S. company earnings and uncertainty on how the rest of

the world responds. Canada has already ordered retaliatory

tariffs and Mexico has flagged a retaliatory response.

Mizuho said equity bulls are re-evaluating their Trump

trades.

"Equity bulls seduced by 'Trump is good for equities'

narrative are subject to a rude wake-up call from the

potentially jarring impact on growth/earnings amid retaliatory

tariff spirals," Mizuho said.

Shares in Hong Kong, Tokyo, Sydney,

Seoul and Taipei made losses around 2%. European

stock futures slid 2.8%.

"I don't believe market participants have fully grasped the

extent of the potential fallout yet, especially as responses

from affected countries unfold," said Tareck Horchani, head of

prime brokerage dealing at Maybank Securities in Singapore.

He said many investors had built positions in dollars and

gold in recent weeks but may still have been surprised by how

quickly Trump's threats turned to action this time around.

"It's possible that some investors underestimated Trump's

resolve on tariffs, expecting more negotiation rather than

immediate action."

ANXIETY

The difficulty in assessing the effect of tariffs is because

their duration and precise rationale remain unknown.

Some investors still believe some sort of deal is possible

or that tariffs will be quickly dismantled if Trump gets what he

wants.

Trump has linked the tariffs to the flow of migrants and

drugs - particularly fentanyl - into the U.S. and demanded

crackdowns in Canada, China and Mexico.

China and Mexico have said fentanyl is America's problem, so

prospects of a breakthrough are unclear.

China, still closed on Monday for the Lunar New Year

holidays, said it would challenge Trump's tariffs at the World

Trade Organization and take unspecified countermeasures.

"These generalised tariffs that cover a much wider range of

products and are targeted toward social policy have usually

proven to be a mistake," said Rick Meckler, partner at Cherry

Lane Investments in New Vernon, New Jersey.

"I think that's why the market has looked at this

sceptically, and with anxiety, all along," he said. "A full

reaction won't be reached until it's clear this is the policy,

however."

Debt markets, meanwhile, seem caught between the negative

inflationary implications of higher consumer prices and the

potential for rate cuts due to the hit to growth - which ought

to be positive for bonds.

Benchmark 10-year Treasuries rallied slightly,

pushing yields about 4.5 basis points lower to 4.52%.