* Industrials lag on fears of global trade war
* Protectionist Navarro says he won't be new Trump econ chief
* Oil drags down energy sector.
* Dow down 0.73 pct, S&P down 0.35 pct, Nasdaq up 0.1 pct (Updates to late afternoon, adds commentary, changes byline)
By Sinéad Carew
March 7 (Reuters) - Wall Street's three main indexes fell on Wednesday as investors worried that U.S. President Donald Trump would deliver on his threat to impose steep import tariffs on imported steel and aluminum and cause a trade war after a key advisor resigned.
Investors also took the resignation, announced late Tuesday, of free trade supporter Gary Cohn from his position as Trump's top economic advisor as a sign of conflict within the White House, adding to the uncertainties over trade.
"Investors who were worried about a trade war before the resignation are even more worried now that a voice for free trade has left the White House," said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute in St. Louis, Missouri.
Cohn, the architect of a tax overhaul passed in December, was seen as a stabilizing force within the Trump administration. His departure is seen strengthening the hands of those advocating a protectionist agenda.
Spokeswoman Sarah Sanders told reporters the White House was on track to announce tariffs by the end of this week.
But markets trimmed losses after White House trade adviser Peter Navarro, who favors tariffs, said in a television interview he was not a candidate to replace Cohn.
Cohn's exit made some investors less confident the administration would be able to continue to implement its pro-business agenda, said Christopher.
"Investors tend to exaggerate political risks and underestimate fundamental risks. We'd always put the economy first. The economy looks solid to us," he said.
On top of the steel tariffs, Trump also told China to develop a plan to reduce its trade imbalance with the United States by a billion dollars.
At 2:44 p.m. ET, the Dow Jones Industrial Average fell 182.57 points, or 0.73 percent, to 24,701.55, the S&P 500 lost 9.67 points, or 0.35 percent, to 2,718.45 and the Nasdaq Composite added 7.08 points, or 0.1 percent, to 7,379.09.
In contrast, the Russell 2000 index, which tracks U.S. small-cap stocks, was up 0.5 percent as more domestically focused companies are seen as having less exposure if foreign governments retaliate by slapping tariffs on U.S. exports.
The S&P energy sector was the biggest percentage decliner of the S&P's 11 sectors with a 1.4 percent drop, weighed down by a 2.3 percent drop in oil prices from data showing a rise in U.S. inventories and output.
Investors were also disappointed by Exxon's decision not to announce a share repurchase plan, sending it down 3.2 percent.
Shares of U.S. manufacturers Boeing, down 1 percent and Caterpillar, down almost 2 percent, were hit by worries about higher input costs as well as potential export trade barriers.
Discount store operator Dollar Tree was down 15.4 percent after reporting disappointing holiday quarter results, while off-price retailer Ross Stores fell 5 percent after its full-year profit forecast came in largely below expectations.
Declining issues outnumbered advancing ones on the NYSE by a 1.23-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored advancers.
The S&P 500 posted 11 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 128 new highs and 18 new lows. (Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Chizu Nomiyama)