Asian Markets Fall; Trade Tensions Intensify as U.S. Congress Passes HK Bill

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© Reuters. © Reuters. – Asian markets fell in morning trade on Thursday, with Hong Kong stocks down more than 1.5% following news that both chambers of Congress passed a pro-Hong Kong rights bill.

The Index last traded at 26,450 by 10:30 PM ET (02:30 GMT), down 1.6%. Tensions in the city rose after the U.S. chamber passed two bills to protect human rights in Hong Kong.

One of the bill is the S. 1838, which would require annual reviews of Hong Kong’s special trade status under U.S. law and sanction officials deemed responsible for human rights abuses and undermining the city’s autonomy.

Another Senate bill, S. 2710, was also passed to ban the export of crowd-control items such as tear gas and rubber bullets to Hong Kong police.

In a statement following the House vote, Senate Foreign Affairs Committee Chairman Jim Risch called it “an important step forward in holding the Communist Party accountable.” Sen. Marco Rubio, a Florida Republican who pushed for the bipartisan measure’s passage, said he urged President Donald Trump to “sign this critical bill into law as soon as possible.”

Trump now faces a dilemma, as the bills comes at a tricky time. The president has been pushing for a partial trade agreement with China and a confrontation at this period of time could imperil a long-awaited trade deal.

Bloomberg cited a source familiar with the matter and reported overnight that Trump is expected to sign the bill, while Reuters said Washington and Beijing may not reach a phase one trade agreement this year.

China’s dropped 0.4% in morning trade, while the inched up 0.1%.

Japan’s lost 1.1%, while South Korea’s traded 1.3% lower.

Down under, Australia’s fell 0.7%.

Overnight in the U.S, the Federal Reserve released the minutes from its October policy meeting.

The central bank said the stance of policy “likely would remain” where it is “as long as incoming information about the economy did not result in a material reassessment of the economic outlook.”

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