Hong Kong chief executive Carrie Lam said Hong Kong was not afraid of US sanctions in response to the territory's new security law, at a press conference on Tuesday.
«Any sanctions will not scare us. We are also mentally prepared,» said Lam after the US announced it was revoking Hong Kong's special trade status.
«When necessary, I believe that our country will also take countermeasures,» added Lam.
On Monday, Washington also said it would be halting its exporting of sensitive military equipment to the territory.
Hong Kong's security law was passed earlier on Tuesday. It allows Beijing to open a national security office in Hong Kong which will be in charge of criminal cases related to national security. According to many, the law could further erode the city's autonomy as laid out under the principle of 'One country, two systems.'