Demand for Treasurys was steady early Tuesday, holding the benchmark 10-year yield around 4.16%, near its lowest since early December, as investors fretted that a tit-for-tat tariff battle between the U.S. and some of its trading partners would slow economic growth.
U.S. President Donald Trump on Monday confirmed he had imposed 25% tariffs on imports from Mexico and Canada, and increased penalties on China’s goods by an additional 10%.
China and Canada responded by slapping tariffs on U.S. goods, and Mexico is expected to do the same, increasing concerns that a trade war would damage economic activity. Indeed, the tariff news comes as investors were already worried about recent data that indicated a slowing U.S. economy.