State-owned traders Cofco and Sinograin were ordered to suspend purchases, according to one of the people, who asked not to be identified discussing a private matter. Chinese buyers have also canceled an unspecified number of U.S. pork orders, one of the people said. Private companies haven’t been told to halt imports, according to one of the people.

The halt is the latest sign that the hard won phase-one trade deal between the world’s two biggest economies is in jeopardy. While Chinese Premier Li Keqiang last month reiterated a pledge to implement the agreement that was inked in January, tensions have continued to escalate since then amid a standoff over Beijing’s move to tighten its grip on Hong Kong.

Beijing’s move eroded the risk-on sentiment that had been prevailing over markets. S&P 500 Index futures gave up gains to trade 0.6% lower, while U.S. 10-year bonds erased declines. The onshore yuan reversed its advance, while soybean futures in Chicago, which had been as much as 1% higher, were little changed.

The measures to halt imports come after President Donald Trump on Friday lobbed a barrage of criticism at Beijing after it moved to impose controversial new national security legislation on Hong Kong. Critics say it will crack down on dissent and undermine the “one country, two systems” principle that has kept Hong Kong autonomous of the mainland since the 1997 handover from the British.

Cofco and Sinograin are China’s key importers of farm goods. They had been making pricing inquiries for 20 to 30 cargoes of U.S. soybeans on Friday but held off on going through with purchases after Trump indicated he would punish Chinese officials, one of the people said. Beijing is waiting to see what steps Trump takes before deciding its next move, one of the people said.

Nobody from the commerce ministry responded to a fax seeking comment. Officials from Sinograin and Cofco also didn’t respond to calls.

Trump said the U.S. would begin the process of stripping some of Hong Kong’s privileged trade status, without detailing how many changes would take effect and how many exemptions would apply. He also promised sanctions against Chinese and Hong Kong officials “directly or indirectly involved” in eroding Hong Kong’s autonomy, though stopped short of giving specifics.

Equity investors had reacted positively to Trump’s remarks, as he didn’t provide any details or time-frame for what actions might come next. It’s unclear how soon the U.S. would move on a range of options, from sanctioning Chinese officials to imposing tariffs on Hong Kong to attacking the territory’s financial stability.

While Trump has periodically threatened to call off the “phase one” trade deal, his top economic advisers have suggested it would continue. Larry Kudlow, director of the National Economic Council, told CNBC on Thursday that the trade agreement “does continue to go on for the moment and we may be making progress there.”

The two sides have traded blows over a range of issues from the coronavirus to Taiwan in recent weeks, and China’s Foreign Minister Wang Yi warned during high-profile legislative meetings in Beijing that some in America were pushing relations to a “new Cold War,” and urged the U.S. to give up its “wishful thinking” of changing China.

China had agreed to buy U.S. farm goods worth about $36.5 billion for 2020 as part of the phase-one trade deal signed in January. However, the coronavirus outbreak roiled those plans, with China only managing to import $3.35 billion in American agricultural products in the first three months of the year, the lowest for that period since 2007, according to data from the U.S. Department of Agriculture.

Still, as China started to gradually reopen its economy from the virus-led lockdown, it had increased its pace of imports, including a more-than 1-million ton cargo of American soybeans in just two weeks in May, and rare purchases of U.S. soybean oil and ethanol.

But then tensions between the U.S. and China began escalating, with Trump blaming the Asian nation for misleading the world about the scale and risk of the coronavirus outbreak. The fallout filtered through to the commodities markets, with China opting to buy Brazilian soy instead of American beans.

In the morning session, a Krungsri Securities stock analystexpected the index to fluctuate between 1,330 and 1,350 points due to uncertainty after curfews were imposed in several US states amid protests against police brutality.

“Meanwhile, investments will come under pressure due to tensions between the United States and China after the US terminated its trade relationship with Hong Kong in response to Beijing’s new national security law,” the analyst said.

However, the index will rebound after Thailand’s House of Representatives approved three loan decrees worth Bt1.9 trillion, and the price of crude oil began rising, he said.

“Energy and petrochemical stocks will gain positive sentiment as the price of crude oil rose more than US$35 [Bt1,111] per barrel after the number of oil and gas rigs in the US fell to its lowest in history,” he added.

The 10 stocks with the highest trade value today were CPALL, SUPER, PTTGC, PTT, KBANK, BBL, TASCO, AOT, STA and SCB.

As of 4.30pm, the price of crude oil dropped by US$0.27 or 0.76 per cent to $35.22 per barrel, while the gold price dropped by $3.90 or 0.22 per cent, to $1,747.80 per ounce.

The US and European indices had a mixed day, while Asian indices were on the rise.

Japan’s Nikkei Index closed at 22,062.39, up 184.50 points, or 0.84 per cent.

China’s Shang Hai SE Composite Index closed at 2,915.43, up 63.08 points, or 2.21 per cent, while the Shenzhen SE Component Index closed at 11,102.15, up 356.07 points, or 3.31 per cent.

Hong Kong’s Hang Seng Index closed at 23,732.52, up 771.05 points or 3.36 per cent.

South Korea’s KOSPI Index closed at 2,065.08, up 35.48 points or 1.75 per cent.

Taiwan’s TAIEX Index closed at 11,079.02, up 136.86 points or 1.25 per cent.

As of 9.35am, the buying price of a gold bar was Bt26,000 per baht weight and selling price Bt26,100, while gold ornaments were priced at Bt25,529.44 and Bt26,600, respectively.

At close on Saturday, the buying price of a gold bar was Bt25,850 per baht weight and selling price Bt26,050, while gold ornaments were priced at Bt25,337.84 and Bt26,550, respectively.

The Gold Spot Index price this morning moved to around US$1,738 (Bt55,203) per ounce after the price rose by $23.4 to $1,751.7 per ounce at close on Friday.

Investors were buying gold as a safe haven asset due to uncertainty following the conflict between the US and China on Beijing’s new national security law in Hong Kong, as it could impact the global economy.

The Hong Kong gold price rose by HK$115 to $16,045 (Bt65,741) per tael.

A Krungsri Securities stock analyst expected the index to fluctuate between 1,330 and 1,350 points due to uncertainty amid protests over police brutality after the US announced curfew in many states.

“Meanwhile, investment will come under pressure due to tensions between the United States and China after the US terminated its trade relationship with Hong Kong in response to Beijing’s new national security law,” the analyst said.

However, the index will rebound after Thailand’s House of Representatives approved three loan decrees worth Bt1.9 trillion and the rising crude oil price, he said.

“Energy and petrochemical stocks will gain positive sentiment as the price of crude oil rose more than US$35 [Bt1,111] per barrel after the number of oil and gas rigs in US fell to the lowest in history,” he added.

He recommended investors buy:

▪ Energy stocks which will benefit from the rising crude oil price, such as PTT, PTTEP, Top, PTTGC, IRPC, SPRC and IVL.

▪ Stocks which will benefit from the government’s tourism stimulus measures, such as Mint, Centel, ERW and AOT.

▪ Stocks whose second quarter performance will improve, such as CKP, Tasco, STA and RS.

After five days of debate, the lower house voted in favour of the Bt1.9-trillion package proposed by the government by issuing three related emergency decrees.

MPs voted 274 in favour of the first decree enabling the Finance Ministry to borrow Bt1 trillion in order to provide support to people adversely affected by the virus outbreak, while 204 MPs abstained.

The second emergency decree, authorising the Bank of Thailand to provide Bt500 billion soft loans to support small and medium enterprises (SMEs) hit by the Covid-19 fallout, sailed through with 275 voting in favour and 205 abstaining.

The third emergency decree to support bond market liquidity via the Corporate Bond Stabilisation Fund (BSF), established by the Finance Ministry and the Bank of Thailand, prevailed with the backing of 274 MPs and 195 abstaining. There were 487 MPs in attendance for the voting session — 276 from the coalition government and 211 from the opposition.

Nateepat Kulsetthasith, Move Forward Party MP, criticised the BSF as benefiting large corporates the most because it requires investment grade bonds, or BBB rated, to be eligible for bailout. Only large firms could raise funds via investment grade bonds, he said.

He also criticised the Bt500-billion soft loans available to support SMEs as too small, or only 10 per cent of the total SME market lending of Bt5 trillion.

Meanwhile, Wanvipa Maison, another Move Forward Party MP, questioned the governance of the BSF saying it was likely to benefit large corporations.

She suggested that some conditions to protect labour be added: the companies eligible for fund support must not lay off workers. They must have no record of abuse of labour rights. In case they have a current legal dispute with labourers, they should drop the case. In the future, if they abused labour rights, they must be forced to buy back corporate bonds from the fund. She also lamented that while businesses get financial support quickly, people have to wait longer for assistance.