The US faces potential retaliation from China over a bill that may close Hong Kong trade offices.

• The legislation would mandate the U.S. secretary of state to annually evaluate the "privileges, exemptions and immunities" granted to Hong Kong's Economic and Trade Offices.
• Beijing has warned the U.S. to halt the act to prevent further harm to China-U.S. relations and threatened to take strong countermeasures.

The U.S.-based trade offices in Hong Kong may be shut down due to a bipartisan bill passed by American lawmakers, which has been strongly condemned by both the Chinese-ruled city and Beijing.

On Tuesday, the U.S. House of Representatives passed the Hong Kong Economic and Trade Office Certification (HKETO) Act with significant approval.

The U.S. secretary of state would be required to annually review the "privileges, exemptions and immunities" granted to Hong Kong's Economic and Trade Offices if the bill passes the Senate and is signed into law.

If the secretary of state determines that an office no longer has a "high degree of autonomy" from the Chinese government or poses concerns related to national security, it will be required to terminate operations.

On Wednesday, Beijing strongly condemned the act's passing and accused the U.S. of politicizing normal economic cooperation and attempting to contain Hong Kong's development.

A government spokesperson stated that China is urging the U.S. to halt its actions that could harm the stability and growth of China-US relations. If the U.S. continues, China will respond with strong and determined measures.

The Hong Kong government criticized the US for distorting the truth, violating international laws and standards, and meddling excessively in Hong Kong's affairs.

The 14 Economic and Trade Offices of Hong Kong located abroad promote the finance center's economic and trade interests and assist overseas businesses in expanding in the city.

Critics of HKETO have claimed that these offices function as proxies for the Hong Kong government and, consequently, Beijing.

Since the passage of a Beijing-backed national security law in 2020, Hong Kong's diplomatic relations with Washington have deteriorated due to accusations of a breakdown in communication and trust.

GOP Rep. Chris Smith, chair of the Congressional-Executive Commission on China, stated in a hearing on Tuesday that the bill is a crucial step in proving the US's commitment to supporting the oppressed people of Hong Kong.

He stated that the United States should not grant diplomatic privileges and immunities to a network of communist spies and propagandists.

The Hong Kong government enacted an additional security law, Article 23, in March, which has raised concerns among U.S. officials and analysts about its potential to undermine Hong Kong's autonomy and harm U.S. businesses operating there.

The People's Republic of China is becoming more risky for businesses, according to a statement from the U.S. State Department last week.