Treasury yields hold steady as Trump threatens 30% tariffs on EU, Mexico

U.S. Treasury yields were little changed on Monday morning after President Donald Trump announced additional tariffs of 30% on the European Union and Mexico over the weekend.

At 5:52 a.m. ET, the 10-year Treasury yield held steady at 4.423%, and the 30-year yield was up just over a basis point at 4.971%. The 2-year yield was down 2 basis points, reaching 3.891%.

One basis point is equal to 0.01% and yields and prices move in opposite directions.

Tariff news continues to dominate as Trump announced additional levies over the weekend. This time, the president is threatening to impose 30% tariffs on the EU and Mexico, which will take effect on Aug. 1.

He said that if the EU or Mexico retaliates with higher tariffs, “then, whatever the number you choose to raise them by, will be added on to the 30% that we charge.”

Deutsche Bank analysts said in a note, “To be fair, a month ago Trump threatened the EU with a 50% tariff, so you might argue this is an improvement! The market will generally think this is mostly a negotiating tactic and that we're unlikely to see such rates.”

On the economic data front, investors will keenly await June's inflation reading on Tuesday, followed by the producer price index on Wednesday, which will offer more clarity about the impact of tariffs on the economy.

Investors are also on alert as Trump's conflict with U.S. Federal Reserve Chair Jerome Powell comes into focus again, after National Economic Council Director Kevin Hassett said Sunday that the Trump administration could fire Powell “if there's cause.”