The US secretary of state formally notified Congress that China’s new national security law meant that the territory could no longer be treated as it had been since before the 1997 handover. The declaration comes after Chinese parliament signed off on a new “national security” law for Hong Kong, which will be imposed without the approval of its democratically elected assembly. The US declaration appears to open the way for the US ending Hong Kong’s special trading status as a result.

The ending of the trade deal is set to be a severe blow to Hong Kong as tensions rise once again following the breakdown in relations caused by the coronavirus crisis.

The end of the current trading status would mean that goods from Hong Kong would become subject to the same tariffs now applied by the US to ones from mainland China.

It came just hours after President Xi Jinping said that China must be ready for war as relations between Beijing and Washington hit a new low.

In a written statement about China’s new security law, Mr Pompeo said: “Beijing’s disastrous decision is only the latest in a series of actions that fundamentally undermine Hong Kong’s autonomy and freedoms and China’s own promises to the Hong Kong people under the Sino-British joint declaration.

“I certified to Congress today that Hong Kong does not warrant treatment under United States laws in the same manner as US laws were applied to Hong Kong before July 1997.

“No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.”

He added: “Hong Kong and its dynamic, enterprising and free people have flourished for decades as a bastion of liberty, and this decision gives me no pleasure.

“But sound policy-making requires a recognition of reality.”

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He said: “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 modelling Hong Kong after itself.”

On Sunday Robert O’Brien, the president’s national security adviser, said that if Mr Pompeo could no longer certify Hong Kong’s autonomy then “there will be sanctions that will be imposed on Hong Kong and China”.

Joe Biden, President Trump’s probable Democratic rival, welcomed Mr Pompeo’s announcement.

He said: “The United States must take a stand against China’s crackdown in Hong Kong.”

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Economic and visa restrictions on China would also be expanded to the territory, dealing a significant blow to Hong Kong’s role as a multinational business hub.

Washington also requested an emergency UN meeting to discuss China’s new law yesterday.

However, Beijing refused to allow it to proceed, according to US diplomats.

Washington’s UN mission said that the issue was “a matter of urgent global concern that implicates international peace and security”.

Commenting on China’s decision to block the meeting, the US said: “This is another example of the Chinese Communist Party’s fear of transparency and international accountability for its actions.”

Zhang Jun, the Chinese ambassador to the UN, responded to the US request on Twitter, calling it “baseless”.

“Legislation on national security for Hong Kong is purely China’s internal affairs,” he said.

“It has nothing to do with the mandate of the Security Council.”

The UK has also joined the US, Canada and Australia in opposing the new security laws.

Moreover, the UK will allow thousands to move to Britain if China presses ahead with plans to reduce the territory’s level of autonomy.

Foreign Secretary, Dominic Raab has warned that if China does not withdraw the law, the UK will change the rules for 169,000 holders of British National (Overseas) passports, issued to Hong Kong residents at the time of the handover in 1997.

Mr Raab said: “If China goes down this path and implements this national security legislation, we will be required to change the status of BNO passport holders and set in train arrangements which allow them to come to the UK for longer than the current six-month period and to apply for extendable periods of 12 months to work and study, which itself will provide a passport to citizenship.”