US President Donald Trump has said he had noted the "very tricky" state of the crucial US bonds market before his sudden climbdown on global tariffs this evening.
"I was watching the bond market. The bond market is very tricky. I was watching it," he said at the White House. "I saw last night where people were getting a little queasy."
"The bond market now is beautiful."
Mr Trump said he would temporarily lower new tariffs on many countries, even as he raised them further on imports from China, in a sudden reversal that sent US stocks sharply higher.
His announcement came less than 24 hours after steep new tariffs kicked in on imports from dozens of trading partners.
The new trade barriers have hammered markets, raised the odds of recession and prompted retaliatory responses from China and the European Union.
Mr Trump said he would raise the tariff on Chinese imports to 125% from the 104% level that took effect at midnight, further escalating a high-stakes confrontation between the world's two largest economies.
Mr Trump said he would at the same time suspend targeted tariffs on other countries for 90 days to allow time for US officials to negotiate with countries that have sought to reduce them.
However, details were not immediately clear.
A 10% blanket duty on almost all US imports will remain in place, the White House said.
The announcement also does not appear to affect duties on auto, steel and aluminium that are already in place.
US stock indexes shot higher on the news, with the benchmark S&P500 up more than 6%.
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Bond yields came off earlier highs and the dollar rebounded against safe-haven currencies.
Earlier, global markets took a pummeling, with the damage spreading beyond stock markets that have seen trillions of dollars in inequity evaporate over the past week.
China and the European Union had announced new trade barriers.
China announced a tariff hike on US imports to 84% from 34%, shortly after Mr Trump's punitive 104% tariffs on Chinese imports kicked in this morning, as a standoff between the world's two largest economies showed no signs of resolution.
The EU said it would impose 25% tariffs on a range of US imports in a first round of counter measures.
The 27-member bloc faces US tariffs of 20% on most products and higher duties on autos and steel.
Oil prices plunged to four-year lows, while investors dumped US Treasury bonds and the dollar, which are typically seen as safe havens.
Japan and Canada said they would cooperate to stabilise the global financial system - a task usually taken on by the United States during times of crisis.
Mr Trump had shrugged off the market rout and offered investors mixed signals about whether the tariffs will remain in the long term, describing them as "permanent" but also boasting that they are pressuring other leaders to ask for negotiations.
"BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!" he wrote on social media earlier in the day.
Mr Trump said the tariffs will help rebuild an industrial base that has withered over decades of trade liberalisation, though he says he is open to negotiating down those barriers with trading partners on a country-by-country basis. US officials, however, say they will not prioritise talks with China.
"The US escalation of tariffs on China is a mistake on top of a mistake, which seriously infringes on China's legitimate rights and interests and seriously undermines the rules-based multilateral trading system," China's finance ministry said in a statement earlier.
Beijing also imposed restrictions on 18 US companies, mostly in defence-related industries, adding to the 60 or so American firms already punished over Mr Trump's tariffs.
China called its trade surplus with the United States an inevitability and warned it had the "determination and means" to continue the fight if Mr Trump kept hitting Chinese goods.
China's currency has faced heavy downward pressure, with the offshore yuan at record lows due to the tariffs. But sources told Reuters the central bank has asked major state-owned banks to reduce US dollar purchases and would not allow sharp yuan declines.
Chinese makers of plastic Christmas trees and other holiday ornaments, who account for 87% of the US market, say they have not yet received orders from US importers.
US stock indexes were mixed at the open this morning. Since Mr Trump unveiled his tariffs on 2 April, the S&P 500 has suffered its deepest loss since the benchmark's creation in the 1950s.
Global drugmakers' stocks dropped across the board after Mr Trump reiterated plans for a "major" tariff on pharmaceutical imports on top of existing duties.
Economists say Mr Trump's tariffs could increase costs for the average US household by several thousands of dollars annually, which could become a political liability for a president who campaigned on lowering the cost of living.
Three out of four Americans expect prices to increase due to Mr Trump's tariffs, according to a Reuters/Ipsos poll.
Some companies have said they will raise prices immediately, but others could take time to materialise as the tariffs do not apply to goods currently in transit.
Opposition Democrats, locked out of power in Washington, have struggled to form a coherent response.
Some have blasted the tariffs as counterproductive, but others have said that Mr Trump is simply going too far.
"Tariffs need to be used like a scalpel, not a hammer," Michigan Governor Gretchen Whitmer, a swing-state governor seen as a possible presidential candidate, said at an event in Washington.
