The three main U.S. stock index futures fell more than a percent on Tuesday after the latest tariff threat on Chinese goods by the United States escalated a trade spat between the world's two largest economies and triggered a flight to safer assets.

All the 25 Dow components trading premarket were in the red and the bluechip index was on pace to erase all its year-to-date gains at open.

Shares in Boeing, the single largest U.S. exporter to China, fell 1.8 percent, while Caterpillar declined 2 percent.

U.S. President Donald Trump on Monday threatened to impose a 10 percent tariff on $200 billion of Chinese goods to which Beijing warned it would fight back with "qualitative" and "quantitative" measures.

Adding fuel to the intensifying trade dispute was the passage of a defense bill that set up a potential battle with the White House over whether ZTE Corp, can resume business with its U.S. suppliers.

The U.S.-China trade dispute has stirred up the financial markets since February over worries that a full-blown trade war could threaten global economic growth.

Gold prices edged higher and yields on the benchmark U.S. Treasury bonds dipped to more than two week low as demand for safe assets rose.

At 6:38 a.m. ET, Dow e-minis were down 331 points, or 1.32 percent. S&P 500 e-minis were down 30.25 points, or 1.09 percent and Nasdaq 100 e-minis were down 75.75 points, or 1.04 percent. (Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)

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