(Updates with morning prices)

By Pranav Kashyap

March 3 (Reuters) - Canada's main stock index edged up

on Monday, as investors braced for the U.S. President's proposed

tariffs to take effect and assessed economic data from both

Canada and the U.S.

At 10:20 a.m. ET (1520 GMT), the Toronto Stock Exchange's

S&P/TSX composite index was up 0.1% at 25,432.78.

U.S. Commerce Secretary Howard Lutnick confirmed the tariffs

on Canada, Mexico, and China would take effect on Tuesday, while

President Trump would decide on whether to maintain the proposed

25% tariff rate, leaving investors anxious.

"You could see the TSX pull back as we get closer to

tomorrow's tariff deadline. The effects will be negative on the

markets for sure," said Allan Small, senior investment advisor

of the Allan Small Financial Group with iA Private Wealth.

Canadian energy minister Jonathan Wilkinson said in a CNBC

interview that if the U.S. imposes tariffs, Canada will

retaliate.

The energy sector was the worst performer in the

session, with the oilfield drilling and services sector feeling

the tremors of the tariff threats, sparking concerns that the

anticipated industry recovery might falter if levies were

enacted.

On the economic horizon, Canadian manufacturing activity

contracted for the first time in six months in February as an

uncertain trade outlook led to firms turning the most

pessimistic since the start of the COVID-19 pandemic.

U.S. manufacturing was steady in February, PMI data showed.

Canadian employment data for the same period will also be

unveiled later in the week.

Sector-wise, the materials sector was the top

performer, up 1.2%, with gold prices rising due to a weaker

dollar and safe-haven buying amid concerns over Trump's tariff

policies.

Meanwhile, oil prices were stable as investors awaited the

outcome of efforts to end the Russia-Ukraine war and assessed

the repercussions of U.S. tariffs.

Among individual stocks, Interfor ( IFSPF ) lost 9%, hitting

a three-week low.