President Donald Trump on Tuesday signed legislation that gives his administration more power to impose sanctions on Chinese officials in retaliation for a draconian national security law Beijing imposed on Hong Kong.

Mr Trump said the Hong Kong Autonomy Act would give the White House “powerful new tools to hold responsible the individuals and the entities involved in extinguishing Hong Kong’s freedom”. The president also signed an executive order removing special trade and economic privileges that Hong Kong has enjoyed for years.

The move comes weeks after China circumvented the Hong Kong legislature and introduced a harsh anti-subversion law aimed at stamping out the pro-democracy movement in the former British colony. Mr Trump said Hong Kong would lose its position as a competitive financial hub because of the crackdown.

“Hong Kong in my opinion . . . will no longer be able to compete with free markets,” Mr Trump said at a news conference at the White House. “We’re going to do a lot more business because . . . we just lost one competitor.”

US-China relations have hit their lowest levels in decades as Beijing and Washington fight over a wide range of issues, including trade, human rights, espionage and the spread of the coronavirus pandemic.

Congress has also taken a harder stance on China in recent months to punish Beijing for its actions in Hong Kong and human rights abuses against Muslim Uighurs in Xinjiang.

The US last week placed sanctions on several Chinese officials involved in setting policy in Xinjiang, the northwestern province where more than 1m Uighurs have been detained in re-education camps. The White House also took a tougher stance on disputes in the South China Sea, which the US considers international waters but China claims much of it as its own territory.

READ ALSO  Big Oil hits brakes on search for new fossil fuels

China on Monday retaliated against the US measures by imposing its own sanctions on a state department official and three lawmakers, including Marco Rubio and Ted Cruz, two hawkish Republican senators. 

Mr Trump had previously said he would revoke the preferential treatment Hong Kong enjoyed under the “one country, two systems” model that underpinned its autonomy after the UK handed the territory back to China in 1997.

The White House last month said China’s new Hong Kong security law meant the territory was no longer autonomous and therefore no longer qualified for preferential treatment from the US.

“Hong Kong will now be treated the same as mainland China, no special privileges, no special economic treatment, and no export of sensitive technologies,” Mr Trump said on Tuesday.

Mr Trump also appeared to welcome the decision by Boris Johnson, British prime minister, to ban Huawei from its 5G telecoms network, in a reversal that came after months of intense pressure from Washington.

“That was up in the air for a long time, but they have decided,” Mr Trump said about the UK decision.

Follow Demetri Sevastopulo on Twitter: @dimi

Via Financial Times