STATE DEPARTMENT - U.S. Secretary of State Mike Pompeo said Wednesday that he has reported to the U.S. Congress that Hong Kong is "no longer autonomous from China" and "Hong Kong does not continue to warrant treatment under United States laws," given facts on the ground.

The secretary's remarks indicate the United States is considering suspending the preferential status that has made the city a top U.S. trading partner.

Pompeo's remarks comes after China's National People's Congress announced its intention to unilaterally impose national security legislation on Hong Kong, a move seen as further undermining Hong Kong's autonomy which the Beijing government promised to maintain under the Sino-British Joint Declaration, a U.N.-filed international treaty.

Beijing's legislative proposals mark a dramatic shift for Hong Kong, which has long enjoyed greater political freedoms under a semi-autonomous, elected government once seen as a role model for mainland China.

"While the United States once hoped that free and prosperous Hong Kong would provide a model for authoritarian China, it is now clear that China is modeling Hong Kong after itself," said Pompeo.

Political tensions have further escalated in Hong Kong in recent weeks after Hong Kong's law enforcement authorities arrested 15 pro-democracy activists in April, including founder of Hong Kong's Democratic Party Martin Lee, a move the U.S. condemned.

The "Hong Kong Human Rights and Democracy Act," enacted last November, requires the State Department to certify at least annually that the former British colony retains enough autonomy to justify the favorable U.S. trading terms that have helped it maintain its position as a world financial center.

Hong Kong returned to Beijing in 1997 under the "one country, two systems" framework that granted the city broad freedoms not seen in mainland China.

Under the U.S. law, officials responsible for human rights violations and abuses in Hong Kong could be subject to sanctions.

"It's a very concerning time," said Elizabeth Economy who is director for Asia studies at the Council on Foreign Relations.

"I think one of the most concerning elements is certainly the plan to have China's public security bureau inside Hong Kong. It already has a PLA garrison there. But once you put the public security people in the surveillance system, you really begin to get the sense that they are moving to a time when there will be no difference between the way that Hong Kong's citizens are treated and those in the mainland are treated in terms of the threats of their political rights," said Economy in a recent webinar hosted by Hoover Institution at Stanford University.

Trump said Tuesday the U.S. is working on a response after Beijing's announced national security laws on Hong Kong, but the president did not give details on whether he would suspend any of the economic privileges Hong Kong currently enjoys.

The U.S. "would need to think through very carefully how to move through this process," said Economy, to avoid harming the Hong Kong people and U.S. companies in Hong Kong.

Taiwan React

China's moves have also reverberated in Taiwan, where many have long watched how Beijing treats Hong Kong residents. On Wednesday, more than 20 civil society groups gathered in Taipei Wednesday to show solidarity with Hong Kong.

One attendee, named Justine, told VOA, "If the national security law is passed, 7.5 million people in Hong Kong will be unsafe, and the Chinese Communist Party is labeling the people who seek democracy and autonomy as terrorists, so now (every) Hong Konger is a fighter."

Many in Taiwan see China's moves in Hong Kong as the start of a new, tense era over the region's future.

Wu Rwei-ren, a research fellow with the Institute of Taiwan History, Academia Sinica told VOA that this is a "calculated brinkmanship" from China while other countries are struggling with combating the COVID-19 pandemic.

"This marks the first war amid the new cold war between the US and China," he said, "Hong Kong's fight for autonomy will be persistent, and Taiwan will likely be the next target."

Joyce Huang, Yihua Lee, Jeanette Chiang, and Adrianna Zhang contributed to this report