Treasury prices climbed on Monday, pushing yields lower, after President Donald Trump threatened to raise tariffs on Chinese imports, potentially jeopardizing recent trade talks.

What are Treasurys doing?

The 10-year Treasury note yield TMUBMUSD10Y, -1.43%   fell 4.8 basis points to 2.483%. The 2-year note yield TMUBMUSD02Y, -1.56%   retreated 4.9 basis points to 2.290%, while the 30-year bond yield TMUBMUSD30Y, -1.05%   slipped 3.3 basis points to 2.893%. Bond prices move inversely to yields

What’s driving the market?

President Donald Trump threatened to raise tariffs on $200 billion of Chinese imports to 25% from 10%, citing slow progress in trade negotiations. He also added that tariffs would be applied to the rest of the untaxed $325 billion of Chinese imports. In response, Beijing said it was deliberating whether to stop a planned delegation to Washington this week, though it walked back its comments on Monday.

See: Trump tweets tariff threat on Chinese goods, roiling global markets

Trump’s remarks took investors across the world by surprise, with many on Wall Street previously expecting Washington and Beijing to reach a trade deal within the next few weeks. Futures for the S&P 500 YMM9, -1.78%   and Dow ESM9, -1.61%   show stocks are poised to open sharply lower, drawing sharp demand for haven assets like government paper.

Asian equities saw a brutal fall. China’s CSI 300 index 000300, -5.53%   closed lower by about 5.8% and Hong Kong’s Hang Seng Index HSI, -2.90%   lost 2.9% on Monday.

What did market participants say?

“Trade experts are uncertain how to interpret the President’s Sunday threat to impose further tariffs on imports from China. Is he trying to apply pressure to get a deal done this week? And if so, will this work, or will it backfire?” said Kit Juckes, global strategist at Société Générale.

What else is on investors’ radar?

Philadelphia Fed President Patrick Harker will give a speech at 9:30 a.m. Eastern time.

See: For the Fed, the mantra is now ‘it’s inflation stupid’

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