Treasury yields are little changed as traders focus on new Trump tariff announcements

U.S. Treasury yields were little changed on Tuesday as investors continue to assess the aftermath of President Donald Trump’s tariff letters threatening steep duties on several countries, including key allies.

The benchmark 10-year yield was up 1 basis point at 4.407%, and the 30-year bond yield was unchanged at 4.93%. The 2-year Treasury yield was also flat at 3.903%.

One basis point is equal to 0.01%. Yields and prices have an inverse relationship.

President Donald Trump announced Monday that steep new tariffs will take effect on imports from 14 countries beginning Aug. 1.

In a flurry of social media posts, he published screenshots of letters addressed to leaders in Japan, South Korea, Malaysia, Kazakhstan, South Africa, Laos and Myanmar, outlining the new trade measures.

A second batch of letters later targeted Bosnia and Herzegovina, Tunisia, Indonesia, Bangladesh, Serbia, Cambodia and Thailand.

Japan is set to face a hike in the “reciprocal” tariff rate first announced by Trump in April. The White House said Japanese goods entering the U.S. will be hit with a 25% tariff starting Aug. 1, up from the previously announced 24%.

While Trump had said late Monday that the new Aug. 1 tariff deadline is “not 100% firm,” he changed his tone a day later. On Tuesday, the president posted on Truth Social that there will be no change or extension to the Aug. 1 date. Later that day, Trump also announced a steep 50% tariff on copper imports.

That said, Trump had said he was open to more negotiations. However, the threat of higher tariffs is creating headwinds for U.S. investment sentiment and increasing uncertainty about U.S. inflation, said David Kohl, chief economist at Julius Baer.

The ongoing threat of higher tariffs intensifies stagflationary risks in the U.S. and puts pressure on Europe to stimulate domestic demand as a means to offset headwinds in international trade, Kohl wrote in a note.

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