The yield on the benchmark 10-year Treasury note fell to its lowest level since 2016 on Thursday after President Donald Trump announced new tariffs on Chinese goods.

The president said on Twitter that 10% duties will be imposed on $300 billion worth of Chinese goods, effective Sept. 1. Trump's tweets came after a U.S. delegation met with Chinese trade officials earlier this week.

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At around 2:30 p.m. ET, the yield on the benchmark 10-year Treasury note had fallen approximately 15 basis points to 1.878%, its lowest level since November 2016. The yield on the 30-year Treasury bond, which clinched its lowest level since October 2016 on Thursday, last traded at 2.428%. It hit a low of 2.422% earlier in the session.

"The tweet is bringing back the 'trade war' risk that markets have dealt with at various times over the past year. My guess is it is a negotiating tactic, but markets are concerned as the stakes are high and there is a chance it backfires,"said Arthur Bass, managing director of fixed income financing, futures, and rates at Wedbush Securities.

"Fed fund futures are now fully pricing two additional 25bp moves this year, although that could easily reverse if the risk-off move abates," Bass added. "With today's move, fixed income investors will no doubt be positioned a bit long going into tomorrow's employment release," when the government will announce July's jobs data.

Yields were also under pressure Thursday after the Federal Reserve in the prior session cut interest rates for the first time since 2008.

In approving the cut, the FOMC pointed to "implications of global developments for the economic outlook as well as muted inflation pressures." It also characterized economic growth as "moderate" and the labor market "strong," but eased policy regardless.

The 2-year Treasury note yield, more representative of changes to Fed policy, fell 16 basis points to 1.72%, off an earlier low of 1.694%, its lowest since November 2017.

The policymaking committee made explicit reference to inflation, a threat to bonds as rising prices chip away at the real value of their fixed payments.