Trump May Sign Hong Kong Pro-Democracy Bill, Despite Chinese Opposition Potentially Derailing Trade Talks

Now that the U.S. House of Representatives and Senate have both passed a bill designed to show support for Hong Kong pro-democracy protesters, worries have arisen about if or when a new trade deal with China will occur.

The bill now goes to President Donald Trump for signature. A source told Reuters Trump may indeed sign the bill although he refused to answer direct questions on the matter from reporters on Wednesday.

Known as the Hong Kong Human Rights and Democracy Act, the bill has already been condemned by Chinese Foreign Ministry spokesman Geng Shuang. Beijing has threatened “strong countermeasures” should the bill become law.

Shuang further said Thursday that "no one should underestimate China's determination to safeguard its national sovereignty and interests.”

The Hong Kong Special Administrative Region government also condemned the U.S. Congress for passing the Hong Kong bill.

"The Hong Kong Human Rights and Democracy Act and the other act on Hong Kong are unnecessary and unwarranted,” the Hong Kong government said. “They will also harm the relations and common interests between Hong Kong and the United States.”

Eswar Prasad, the former chief of the International Monetary Fund’s China division, said Hong Kong bill could ruin chances for a new trade pact with China. “The legislation will further fuel the narrative in Chinese domestic policy circles that the U.S. is attempting to infringe on the sovereignty of China in terms of its internal economic and political affairs,” he said.

China has demanded the U.S. roll back tariffs on Chinese imports as part of any trade deal. In turn, Trump has threatened to hike tariffs even higher in the absence of such a trade pact. The next round of tariff increases are scheduled for Dec. 15.

Henrietta Treyz, director of economic policy at the investment firm Veda Partners, said the Hong Kong bill raised the likelihood that the December tariffs will indeed come to fruition.

“Tensions are rising between the two nations, not dissipating,” she said. “The prospect of not reaching a deal and requiring escalation from here remains quite real.”

The Wall Street Journal reported Chinese Vice Premier Liu He invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin for new trade talks in Beijing.

Meanwhile, Sen. Marco Rubio, R-Fla., said he urged Trump to “sign this critical bill into law as soon as possible.”

Even if Trump does not sign the bill, Congress could override his veto since it was passed almost unanimously in the House and Senate.

Among other things, the bill would require the U.S. State Department to annually certify that Hong Kong has sufficient autonomy to maintain its special trade status. It also would impose sanctions on anyone who commits human rights violations in Hong Kong.