By Purvi Agarwal

Feb 3 (Reuters) - Emerging market assets broadly sold off on Monday, with the Mexican peso slumping to a near three-year low, after U.S. President Donald Trump slapped tariffs on top U.S. trading partners, sparking concerns of a global trade war.

Trump on Saturday ordered sweeping tariffs on Mexican, Canadian and Chinese imports, with a hefty 25% on the U.S. neighbors and a 10% on goods from China, starting Tuesday.

The Mexican peso MXN= dropped 1.4%, after touching its lowest level since March 2022, and options markets were pointing to more volatility in the coming days.

International bonds issued in Mexico were also broadly lower. Stock markets were closed for a public holiday, but the U.S.-listed exchange traded fund tracking Mexican stocks EWW.P fell 2.5%.

Mexico and Canada immediately announced retaliatory tariffs, while China said it would challenge the order at the World Trade Organization. Further clues are awaited from Trump's call with the Canadian and Mexican leaders later in the day.

"The key for all of this is how long the tariffs last. The market is still discounting the likelihood these tariffs are in place for more than a short period of time," said Brad Bechtel, global head of FX at Jefferies.

"The policy divergence between the US and the rest of the world is starting to widen and that dynamic will likely persist the longer the tariffs remain in place, which means those currencies (MXN and CAD) could get quite a bit weaker."

Major brokerages including JPMorgan warned that the economies of Canada and Mexico could enter a recession if the tariffs were sustained.

Colombia's peso COP= fell 0.6%, despite the country narrowly escaping tariffs after reaching an agreement with the U.S. in January.

Trump's "friendly" talks with China had led investors to hope that the U.S. could take a softer approach to tariffs. But his weekend move fueled uncertainty and sent investors flocking to safe-haven assets, with the dollar higher against most currencies.

The commodities market also took a hit, with copper prices hitting a four-week low, impacting export-heavy Latin American economies.

Stocks in Chile .SPIPSA, the world's largest copper producer, were off 1%, while its peso CLP= weakened 0.7% despite strong December economic activity figures.

MSCI's index tracking Latam currencies .MILA00000CUS was down 1%, while the stocks measure .MIL00000PUS was down 1.6%.

The Brazilian real BRL= fell 1%, while its Bovespa index .BVSP was down 0.1%.

Argentina's peso ARS= depreciated 0.1%, in the first trading session of a new currency scheme. The Merval index .MERV shed 3.1%.

Investors are awaiting more clarity on internal fiscal moves and Trump's new policies to evaluate the outlook for pressured EM assets this year. Argentina and Mexico are due to announce monetary policy decisions this week.

Elsewhere, South African assets slumped after Trump threatened to cut off funding for the country, with the rand ZAR= down 1.1%.

Highlights:

** Chile's economy beats forecasts, grows for sixth straight month in December

** Colombia's Ecopetrol extends contract with Occidental Petroleum in Permian basin

Key Latin American stock indexes and currencies:

(Reporting by Purvi Agarwal in BengaluruEditing by Christina Fincher)

((Purvi.Agarwal@thomsonreuters.com;))