Safe-haven demand for US government debt bodes well for this week's $84 billion May refunding, which kicks off with a three-year note sale at 1 p.m. (1700 GMT).

"The inaugural coupon supply for May's refunding week will be today's $38 (bn) 3-year auction, and given the latest trade war salvo there is surely at least a modest bullish backdrop to today's supply," BMO Capital Markets analysts wrote in a research note.

On Sunday, US President Donald Trump threatened to raise tariffs on $200 billion worth of Chinese goods to 25pc from 10pc by the end of the week, and would "soon" target remaining Chinese imports with tariffs.

The surprise decision cast doubts over the world's two biggest economies reaching a trade agreement any time soon.

Traders are pinning hopes that a deal is still within reach after Beijing said earlier on Tuesday that Chinese Vice Premier Liu will visit the United States this week for trade talks.

At 10:13 a.m. (1413 GMT), the yield on benchmark 10-year Treasury notes was down 3.3 basis points at 2.4674pc.

Thirty-year yields were 3 basis points lower at 2.8782pc.

In "when-issue" activity, traders expected the upcoming three-year issue to sell at a yield of 2.241pc, which was higher than the 2.301pc at the previous three-year auction in April, Tradeweb data showed.