• Trump promises new deal with China can be reached soon
• Chinese retaliation prompted huge stock market sell-off

Amanda Holpuch and Dominic Rushe

Donald Trump  on Tuesday said that “great patriot farmers” in the US would benefit from tariff increases that triggered sell-offs in stock markets across the world.

In a series of tweets, Trump promised a new deal with China would be reached soon and made a case for how farmers would benefit from a tariff increase that many of them oppose.

If China stops buying American farm products because of tariffs, Trump said, farmers will be compensated. “This money will come from the massive tariffs being paid to the United States for allowing China, and others, to do business with us. The farmers have been ‘forgotten’ for many years. Their time is now!”

The long-running trade dispute between the US and China escalated on Friday after Trump raised tariffs on $200bn of Chinese goods from 10% to 25%. China retaliated on Monday with tariffs on $60bn of US imports, precipitating a dive on the US stock markets.

American farmers are likely to feel the pain first. Soybean exports to China collapsed last year when the trade war began, and agricultural exports will be hit harder when, or if, the new tariffs are imposed. Farmers are also suffering from extensive flooding that has delayed planting.

“The sentiment out in farm country is getting grimmer by the day,” said John Heisdorffer, the chairman of the American Soybean Association. “Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting.”

The new round of tariffs will hit other parts of the US food industry, with beans, lentils, honey, flour, corn and oats all on the list of goods that will be taxed.

Despite the mounting economic threat and escalating tensions, Trump was optimistic about reaching a deal with China.

“When the time is right we will make a deal with China,” Trump tweeted. “It will all happen, and much faster than people think!”

Trump’s position has divided Republicans, especially those in agricultural districts who fear the retaliatory tariffs will burden farmers, agricultural businesses and consumers.

The president’s supporters claim short-term economic pain will have positive long-term consequences.

The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick resolution to the dispute. “Americans understand the need to hold China accountable, but they also need to know that the administration understands the economic pain they would feel in a prolonged trade war,” Grassley said in a statement.

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