(Updates with mid-session trading)

By Brigid Riley

TOKYO, Nov 26 (Reuters) - Japan's Nikkei share average

declined on Tuesday as the market reacted to U.S.

President-elect Donald Trump's pledge to impose tariffs on all

imports from Canada and Mexico, along with additional tariffs on

China.

The Nikkei index was down 1.3% at 38,260.38, as of

the midday break, after sliding nearly 2% during morning trade.

The broader Topix also slid 1.3% to 2,681.66.

Trump said on Monday that on his first day in office he

would impose a 25% tariff on all products from Mexico and Canada

and an additional 10% tariff on goods from China, citing

concerns over illegal immigration and trade of illicit drugs.

"Ten percent across the board (for China) is not as big as

the one that he was talking about, 60%. But it still came in a

more concrete way, so I think the initial reaction was rather

negative," Nomura's chief macro strategist Naka Matsuzawa said.

The 25% tariff plans on imports from Canada and Mexico were

probably bigger than the market expected, Matsuzawa added.

China-related sectors such as machinery will likely be more

affected, along with exporters, he said.

Investors reacted with caution toward the latest tariff

pledge, with exporter shares and chip-related stocks sliding.

Chip-testing equipment maker Advantest ( ADTTF ) was among

the biggest decliners by percentage and the largest drag on the

Nikkei, down 5.6%. Tokyo Electron ( TOELF ) tumbled 3%.

Electronics component maker Fujikura Ltd ( FKURF )

dropped 6.8%, while microchip equipment maker Lasertec Corp ( LSRCF )

fell 5.5%, both among the biggest percentage losers.

Major automakers Toyota Motor ( TM ) and Honda Motor ( HMC )

fell 2% and 1%, respectively.

The machinery sector lost nearly 2%. Mitsubishi Heavy

Industries ( MHVYF ) stumbled 3.5%, while Kawasaki Heavy

Industries ( KWHIF ) shed 4.3%.

Shares of IHI were down 3.8%, with news that

Japan's space agency has halted an engine combustion test of its

Epsilon S rocket after a fire broke out at the test site also

weighing on sentiment.

Most Nikkei 225 constituents dropped, with 164 decliners

outnumbering 55 advancers, while six shares remained untraded.