Updates to 4 pm ET

By Johann M Cherian, Sukriti Gupta and Chibuike Oguh

NEW YORK, March 3 (Reuters) - Wall Street's main stock indexes slipped on Monday after President Donald Trump announced the start of 25% tariffs on Canada and Mexico, and after data showed a slight dip in U.S. manufacturing.

Stocks slipped after an ISM survey and extended losses after Trump said 25% tariffs on Canada and Mexico will go into effect on Tuesday with reciprocal tariffs starting April 2. He said the North American countries had "no room left" to avert the tariffs.

The ISM survey showed manufacturing PMI slipped to 50.3 last month from 50.9 in January, while the forward-looking new orders index contracted to 48.6 in February from 55.1 in January. The dip in the PMI mirrored declines in other sentiment measures as investors worried about tariffs.

"I think it's just more of a continuation of a string of bad economic news that tends to put a little bit of a dampener on the optimism that we saw from the fourth quarter earnings that were getting released, which were pretty good," said James St. Aubin, chief investment officer at Ocean Park Asset Management in Santa Monica, California.

"You've got a lot of policy uncertainty from Trump. Certainly layoffs are part of that but also the trade policy. I think that's all working against the positive sentiment forcing that sort of glass-half-full mentality into a back seat position and bringing out some of the bearish glass-half-empty mindset that comes and goes."

According to preliminary data, the S&P 500 .SPX lost 104.19 points, or 1.75%, to end at 5,850.31 points, while the Nasdaq Composite .IXIC lost 497.09 points, or 2.64%, to 18,350.19. The Dow Jones Industrial Average .DJI fell 643.61 points, or 1.47%, to 43,197.30.

Recent reports of softening consumer demand have spurred fears of an economic slowdown and higher inflation. Trump has threatened that an extra 10% duty on imports from China will also take effect on Tuesday, which could spark retaliation from Beijing.

U.S.-listed shares of Chinese companies fell, with Nio NIO.N and JD.com JD.O off about 6% and 1%, respectively.

Worries about sticky inflation have made the Federal Reserve more cautious on interest rate cuts, but this week's employment and business activity data could change the central bank's view.

Traders have been betting on at least two interest rate cuts of 25 basis point each from the Fed by December, according to data compiled by LSEG.

Tesla TSLA.O erased early gains. Morgan Stanley had reinstated the stock as "top pick" among U.S. autos.

Chipmaker Intel INTC.O closed lower, erasing gains that came in early trade after a report that chip designers Nvidia NVDA.O and Broadcom AVGO.O were running manufacturing tests with the company.

(Reporting by Johann M Cherian and Sukriti Gupta in Bengaluru and Chibuike Oguh in New York; Editing by Shinjini Ganguli and David Gregorio)

((johann.mcherian@thomsonreuters.com;))