Trump leans against sanctions on Chinese officials for now

President Donald Trump has indicated to aides that he doesn’t want to further escalate tensions with Beijing, and has ruled out additional sanctions on top officials for now, according to people familiar with the matter.

Trump’s private decision to refrain from further restrictions—which he made before signing the Hong Kong Autonomy Act on Tuesday—contrasts with the combative public tone he has struck for weeks with China over issues ranging from the coronavirus pandemic to trade to Hong Kong’s political freedoms.

The new law calls for sanctions against “primary offenders” undermining Hong Kong’s autonomy but doesn’t require the administration to act immediately.

Trump’s team had already created a list of Chinese officials, including Hong Kong Chief Executive Carrie Lam and Vice Premier Han Zheng, before Trump decided against the move, said two of the people who spoke on condition of anonymity. The president can still decide to move forward with the penalties even if he doesn’t do so now.

Trump had threatened to take action ever since Chinese officials imposed the sweeping national security law on Hong Kong about two weeks ago. China’s implementation of the law, and the reaction of major trading partners who have criticized it, could have a substantial impact on a Hong Kong economy already battered by months of historic anti-government protests and coronavirus restrictions.

On Tuesday, Trump also ordered an end to Hong Kong’s special status with the U.S.

The legislation—which gives the administration 90 days to identify Chinese officials who could be sanctioned for cracking down on political dissent in the city—already drew a rebuke from China and added fresh uncertainty for businesses including banks in the financial hub.

The U.S. already sanctioned a top member of China’s ruling Communist Party and three other officials the over alleged human rights abuses. The administration stands ready to issue more such penalties, one official said.

In response, China on Monday announced sanctions against U.S. officials including Senators Marco Rubio and Ted Cruz, in a largely symbolic retaliation over legislation intended to punish Beijing for its treatment of ethnic minorities in the Xinjiang region.

Many U.S. lawmakers have been pushing for new sanctions on China.

After the House measure passed early this month, Speaker Nancy Pelosi said: “Today’s action is an urgently needed response to the cowardly Chinese government’s passage of its so-called ‘national security’ law, which threatens the end of the ‘one country, two systems’ promised exactly 23 years ago today.”