Yields on U.S. Treasury bonds increased on Tuesday, Jan. 20, following statements from President Donald Trump regarding potential tariffs on several European countries if certain conditions are not met. The market activity occurred as trading resumed after the U.S. bond market was closed Monday for a public holiday.
According to market data from Tuesday, the yield on the benchmark 10-year Treasury note rose by six basis points to 4.287%. Yields on longer-term 20-year and 30-year Treasury bonds each increased by nine basis points, trading at approximately 4.885% and 4.93%, respectively. A basis point is one-hundredth of a percentage point. Bond yields and prices move in opposite directions.
The changes in the bond market followed a statement made by Trump on Saturday. He announced that eight European countries would be subject to tariffs beginning at 10% on Feb. 1 and rising to 25% on June 1 unless a deal was reached allowing the U.S. to purchase Greenland, a semi-autonomous territory of Denmark. The listed countries were Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland.
On Tuesday, Trump also raised the possibility of placing 200% tariffs on French wine and champagne. This statement came after reports that French President Emmanuel Macron was unwilling to participate in a proposed “Board of Peace” concerning Gaza.
In separate comments ahead of his appearance at the World Economic Forum, Trump addressed the United Kingdom’s decision to transfer sovereignty of the Chagos Islands to Mauritius. The islands include Diego Garcia, which hosts a joint U.S.-U.K. military base.
European leaders have reportedly described the tariff proposals as “unacceptable.” According to reports, France is advocating for the European Union to consider countermeasures, including the use of its Anti-Coercion Instrument, an economic tool designed to respond to economic pressure.
