EMERGING MARKETS-Mexican peso trades near a month low after Trump's tariffs materialize

Updates with mid-session trading

By Shashwat Chauhan and Purvi Agarwal

March 4 (Reuters) - The Mexican peso was trading around its lowest level in a month on Tuesday, after U.S. President Donald Trump's long-threatened trade levies on Mexico, Canada and China took effect, fanning fresh global trade tensions.

Trump's new 25% tariffs on imports from Mexico and Canada - after an initial 30-day pause - went live at 12:01 a.m. (0501 GMT), along with a doubling of duties on Chinese goods to 20%.

The peso MXN= hit a one-month low, but was well-off its session lows at 0.2% lower against the dollar. One-month implied volatility on the currency MXN1MO=FN stood at its highest since February 5.

Mexican President Claudia Sheinbaum vowed retaliatory measures, while Canada announced immediate 25% tariffs on C$30 billion worth of U.S. imports with more coming if need be.

Mexican stocks .MXX, however, reversed early losses and were last up 1%, after falling to their lowest level in more than a month.

"Currently the market is really not really pricing in much of an impact from tariffs, simply because it's thinking that both sides will come to some sort of agreement and the tariffs will be rolled back," said Brad Bechtel, global head of FX at Jefferies.

"They are just wondering how long tariffs are going to be in place... the longer they stay, the weaker the currency will become."

Mexico's exports to the U.S. account for around 80% of its total exports and a quarter of its GDP, according to analysts at Capital Economics. They expect Mexico's economy to contract by around 1% this year if the 25% tariffs stay in place.

China slapped additional tariffs of 10%-15% on certain U.S. imports from March 10 and a series of new export restrictions for designated U.S. entities.

Any impact on the Chinese economy will be watched, as it is one of the world's largest consumers of commodities that are heavily exported by Latin American economies.

Top copper producer Chile's peso CLP= edged 0.7% higher, while the Colombian peso COP= dipped 0.6% in low volumes.

MSCI's gauge for Latin American currencies .MILA00000CUS was off 0.3%, while the stocks index .MILA00000PUS was flat.

Equity markets in Brazil and Argentina were closed a second day this week for a public holiday.

Elsewhere, Ukraine's international bonds pared losses and rose over 1 cent each, with the one maturing in 2034 XS2895056013=TE up 1.26 cents to be bid at 57.69 cents to the dollar.

Reuters reported that the U.S. and Ukraine plan to sign the much-debated minerals deal , following a meeting between the countries' leaders that ended in a shouting match last week.

The maturities had initially declined after Trump paused military aid to the warring country.

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Key Latin American stock indexes and currencies:

(Reporting by Shashwat Chauhan and Purvi Agarwal in Bengaluru; Editing by Andrea Ricci)

((Shashwat.Chauhan@thomsonreuters.com;))