*

China retaliates with 34% tariffs on U.S. goods

*

MSCI Latam stocks index down 7.1%, FX off 3.6%

*

EM dollar bonds slide

(Updates through late afternoon trade)

By Johann M Cherian and Lisa Pauline Mattackal

April 4 (Reuters) - Emerging market stock, currencies

and dollar bonds broadly tumbled on Friday, with indexes

tracking Latin American stocks and currencies on track for their

worst day since 2020, as China's retaliation to sweeping U.S.

tariffs deepened fears of economic instability.

China announced additional tariffs of 34% on U.S. goods,

days after U.S. President Donald Trump launched his trade

onslaught on the world, with imports from Beijing slapped with

the highest duties.

MSCI's index tracking Latin American equities

tanked 7.1%, with the index recording its

biggest daily drop since the 2020 market selloff during the

COVID-19 pandemic.

MSCI's gauge of regional currencies weakened

3.6% as the dollar jumped. The gauge fell from the

previous session's 10-month high and was on track to match its

March 2020 one-day slump.

A slump in prices of crude oil and metals hit emerging

market commodity producers, as investors priced-in the

increasing likelihood of a global economic slowdown.

"China is the main market for Latin American commodities...

we have the two main markets in the war and that is going to hit

global demand," said Alfredo Coutino, director for Latin America

at Moody's Analytics.

Emerging market sovereign dollar bonds fell across the board

as investors sought safe havens such as the Japanese yen and

U.S. Treasuries. Bonds issued by Kenya, Angola and Nigeria were

among the hardest hit.

Indexes tracking emerging markets also tumbled, with an

index tracking stocks down 1.7% and the one tracking

currencies losing 0.3%. Both were set for their

worst week since February.

The day's trade reversed strong outperformance in the prior

session for Latin American markets after the region was spared

from the most stringent U.S. levies.

The selloff follows outperformance in emerging markets

compared U.S. stocks and the dollar this year.

Some investors, however, see potential for that performance

to continue despite tariffs.

"We continue to be bullish on EM assets," said Arif Joshi,

portfolio manager, emerging markets debt at Lazard Asset

Management.

"We're hoping ... that we just simply know what the (trade)

rules are going to be in the next 30 days, to the extent that we

get clarity on that, I think markets can normalize."

Mexico's peso depreciated 2.7%, sinking past 20 per

dollar and set for its biggest daily fall since June.

Stocks of commodity heavyweights in Latin America fell, with

Brazil-based Petrobras down 4.3% and Colombia's

Ecopetrol falling 4%. Mining giant Vale slid

4.1%.

Argentina's Merval tumbled 7.4%.

Brazil's real, Chile's peso and Colombia's

peso dropped over 3% each against the dollar, with the

real eyeing its worst day since April 2022.

Ecuador's international dollar bonds

dropped between 1.3 and 2

cents on the dollar, while Argentina's dropped around 2 cents

each.

HIGHLIGHTS

** Latam assets may receive a trade-war boost, investors say

** Brazil's trade surplus exceeds expectations in March

** China retaliation on US farm goods hits soybeans,

bolstering Brazil

** Colombia Finance Minister says government seeks new

international debt markets, sees higher GDP growth

Key Latin American stock indexes and currencies at 1945 GMT:

Equities Latest Daily %

change

MSCI Emerging Markets 1084.42 -1.66

MSCI LatAm 1976.77 -7.12

Brazil Bovespa 127264.75 -2.96

Mexico IPC 51414.39 -4.95

Chile IPSA 7503.52 -2.79

Argentina Merval 2107740.6 -7.379

7

Colombia COLCAP 1618.03 -2.38

Currencies Latest Daily %

change

Brazil real 5.8339 -3.64

Mexico peso 20.464 -2.73

Chile peso 979.48 -3.18

Colombia peso 4287.5 -3.1

Peru sol 3.6763 -0.25

Argentina peso (interbank) 1073.25 0.1164686

7

Argentina peso (parallel) 1290 1.5503875

97

(Reporting by Johann M Cherian in Bengaluru; Editing by

Alistair Bell and Shinjini Ganguli)