Trump's Tariff Threats Spark Surge in US Treasury Yields

U.S. Treasury yields jumped on Tuesday as investors weighed renewed tariff threats from Washington that revived fears of a trade war with Europe. Yields on the benchmark 10-year Treasury were last seen trading around 6 basis points higher at 4.287%. Yields on longer-dated 20- and 30-year Treasurys spiked, adding 9 basis points to trade at around 4.885% and 4.93%, respectively. One basis point is equal to 0.01%, and yields and prices move in opposite directions. Trump announced on Saturday that eight European allies would face increasing tariffs, starting at 10% on Feb. 1 and rising to 25% on June 1, if a deal is not reached that allows Washington to "buy" Greenland, a semi-autonomous Danish territory. The tariffs would potentially target Denmark, Norway, Sweden, France, Germany, the U.K., the Netherlands, and Finland, Trump said. On Tuesday, Trump also threatened to slap 200% tariffs on French wine and champagne after France's President Emmanuel Macron was reported to be unwilling to join his "Board of Peace" on Gaza. European leaders have described Trump's fresh tariff threats as "unacceptable," and are reportedly considering countermeasures — with France said to be pushing for the European Union to use its strongest economic counter-threat, known as the "Anti-Coercion Instrument." Trump also took aim at another NATO ally ahead of his appearance at the World Economic Forum in Davos this week, lashing out at London's decision to transfer sovereignty of the Chagos Islands to Mauritius. The islands include Diego Garcia, home to a joint U.S.-U.K. military base. The Trump administration previously backed the U.K.'s deal with Mauritius. The bond market was closed on Monday for Martin Luther King Day. — CNBC's Holly Ellyatt contributed to this article.