Trade deal “stalled because of Hong Kong legislation”

Via AXIOS:

 A week ago, U.S. sources close to the China talks indicated they were on the precipice of a “Phase One” deal. But that optimism now seems premature, if not misplaced.

  • Congress sent legislation to Trump’s desk that angered Beijing, interrupted the trade talks, and telegraphed support for democracy and human rights in Hong Kong. The new Hong Kong Human Rights and Democracy Act requires the president to impose sanctions on people who violate human rights in Hong Kong.
  • Trump begrudgingly signed off, as the legislation passed with veto-proof majorities.
  • Beijing responded with predictable fury and threats, even as Trump took pains to downplay the bill and to flatter President Xi in his signing statement.

Behind the scenes: A source close to Trump’s negotiating team told me the China deal was now “stalled because of Hong Kong legislation” and that time is needed “to allow Xi’s domestic politics to calm.” The “Phase One” deal with China would probably happen “year-end at the earliest,” and Trump is expected to hold off on his planned December tariffs to keep the deal alive.

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