(Updates with market opening prices)

By Ragini Mathur

Feb 3 (Reuters) - Canada's main stock index fell sharply

on Monday as investors dumped risky assets after U.S. President

Donald Trump's tariffs on Canada.

The S&P/TSX composite index was down 1% at

25,263.92. Wall Street's Nasdaq also fell over 1%.

Trump on Saturday issued 25% trade duties on Canada and

Mexico, along with a 10% levy on China. Canada immediately

announced retaliatory tariffs, sparking fears a trade war

between two close allies.

"If tariffs will last then they could have a really negative

impact on the Canadian economy and that's bad for the Canadian

dollar as well," said John Ewing, CIO and Co-Founder at Ewing

Morris Investment Partners.

Major brokerages including J.P. Morgan warned that Canada

and Mexico could face recessions if the tariffs persist.

The Canadian dollar plunged to a nearly 22-year low

earlier in the session.

Among sectors, industrials fell 1.5%, with

business jet exporter Bombardier tumbling over 8%.

Shares of Canadian auto parts makers also sank; Magna

International ( MGA ) fell 6.5% and Linamar ( LIMAF ) 4.4%.

Shares of alternative financial services company goeasy

tumbled about 11%, contributing to the heavyweight

financials sector falling 1.7%.

Powersports vehicles maker BRP slid 6.5% to its

lowest since 2020, bringing down consumer discretionary

sector 1.8% lower.

Healthcare fell 2.1%, the biggest sectoral loser

on the index.

Domestic data released on Monday showed Canadian

manufacturing activity increased at a slower pace in January as

looming U.S. trade tariffs reduced confidence in the outlook.