** Australian banking sub-index .AXFJ falls 2% to 8,959.60, its lowest level since Jan. 21

** AXFJ slips from a record high scaled in the previous session

** Sub-index among the worst performers, dragging the ASX 200 benchmark index .AXJO down 1.9%

** Losses in-line with benchmark's decline, as U.S. tariffs on Canada, Mexico, and China raise concerns of a full-blown trade war, triggering a sell-off in richly valued Australian banks

** "Big Four" banks decline between 1.7% and 2.5%

** Commonwealth Bank of Australia CBA.AX, the biggest lender in the country, falls 2.2%

** National Australia Bank NAB.AX, the country's biggest business lender, stumbled 2.5% in its worst intraday drop since mid-January

** Regional lenders Bank of Queensland BOQ.AX and Bendigo and Adelaide Bank BEN.AX fall 3.3% and 2.6%, respectively

** AXFJ index up 6% this year, including the day's moves, ahead of 4.6% gains in the broader benchmark .AXJO

(Reporting by Sameer Manekar in Bengaluru)

((Sameer.Manekar@thomsonreuters.com;))