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The new law mandates sanctions on Chinese and Hong Kong officials who carry out human rights abuses and requires an annual review of the favorable trade status that Washington grants Hong Kong.
In response, the Hong Kong government on Wednesday said it strongly opposes and regrets Trump's decision to sign the legislation, which will ultimately damage the city's relationship with the U.S., as reported by Reuters. The city also said it sends a wrong signal to the protesters and will not help to ease Hong Kong's situation.
Trump had remained non-committal on whether he would sign it, suggesting it may hurt negotiations on the "phase one" trade deal with China.
"I stand with Hong Kong, I stand with freedom, I stand with all of the things that we want to do," Trump said last week. "But we also are in the process of making the largest trade deal in history and if we could do that, that would be great."
White House lawyers were reviewing the Hong Kong bill that Congress approved last week, U.S. trade adviser Peter Navarro said Sunday before Trump publicly signaled if he would sign it.
"It's going through the process. It has to clear the White House Legal Counsel," Navarro told FOX Business' Maria Bartiromo on "Sunday Morning Futures." "The president was quite eloquent on Friday about the situation. ... So let's see what happens. It's the president's decision."
Congress approved the Hong Kong Human Rights and Democracy Act last week, with all but one lawmaker voting in favor. A Chinese Commerce Ministry official dismissed speculation that trade talks would falter because of the legislation as "rumors" on Thursday.
FOX Business' Matthew McNulty contributed to this report.