Asian stocks suffered heavy losses on Wednesday due to uncertainties arising from a possible trade agreement between the U.S. and China.
The Hong Kong Hang Seng (HSI) index ended down 1.3%, the Nikkei 225 (N225) index closed down 1.1% and the Shanghai Composite (SHCOMP) lost 0.2%.
The Chinese government warned that the bill passed by the U.S. House of Representatives calling for sanctions against China for news about mass detention centers in Xinjiang would affect bilateral relations in “important areas”.
Hua Chunying, a spokesman for the Chinese Ministry of Foreign Affairs, said that China will not remain indifferent to American actions against the interests of the Asian giant.
Last week, President Donald Trump signed another bill in support of Hong Kong protesters, in protest since June against the progressive erosion of the former British colony’s independence from Beijing.
The bills complicate the way for a solution to the trade war between the two countries.
During his visit to London, the US president told journalists that a trade agreement could come much later than many would expect, probably only after the US elections.
Trump’s latest statements contradict the comments of the previous month when he said that the two countries were “potentially very close” to concluding an agreement.
According to Wilbur Ross, U.S. Trade Secretary, U.S. tariffs on Chinese exports will continue to be less than an agreement.
The next round of tariffs will enter into force on 15 December, unless a postponement is made.
According to some analysts, the Trump administration is trying to apply pressure on China to accept the current agreement on the table, hinting that the deal could be worse post-election 2020, prolonging the period of uncertainty for an indefinite time.
The trade war is taking place at a time of general weakness in the global economies.