Asian markets fell in early trading Wednesday after President Donald Trump said a trade deal with China may not come until after the 2020 presidential election.

“In some ways, I think it’s better to wait until after the election if you want to know the truth. But I’m not going to say that, I just think that,” Trump said Tuesday at a news conference in London, where he was attending a NATO summit.

U.S. stocks sank after the remark, though the three major indexes closed above session lows.

Trade tensions could escalate further, after Congress late Tuesday overwhelmingly approved a bill condemning China’s mass detention of ethnic Muslims, and called for sanctions against some officials responsible. China reacted harshly last week to a bill Trump signed last week supporting Hong Kong’s pro-democracy protesters.

Japan’s Nikkei

NIK, -1.05%

  fell 1.2%, as the country’s parliament on Wednesday approved a trade deal with the U.S. Hong Kong’s Hang Seng Index

HSI, -1.02%

  sank 1.1%, while the Shanghai Composite

SHCOMP, -0.30%

  retreated 0.3%. South Korea’s Kospi

180721, -0.73%

  dropped 1%, and benchmark indexes in Taiwan

Y9999, -0.18%

 , Singapore

STI, -0.26%

 , Malaysia

FBMKLCI, -0.64%

  and Indonesia

JAKIDX, -0.42%

  all fell. Australia’s S&P/ASX 200

XJO, -1.58%

  declined 1.4% after data showed the economy sputtered in the third quarter despite fiscal stimulus.

Among individual stocks, Fast Retailing

9983, -5.21%

  sank in Tokyo trading after the Uniqlo parent said sales fell more than 5% year-over-year in November. Honda

7267, -0.45%

 and oil producer Inpex

1605, -1.31%

  also fell. In Hong Kong, tech company Sunny Optical

2382, -3.56%

  and developers China Overseas Land & Investment

688, -3.27%

  and New World Development

17, -1.76%

  declined. Samsung

005930, -0.90%

  retreated in South Korea, and BHP

BHP, -2.49%

  and Rio Tinto

RIO, -2.05%

  tumbled in Australia.

“Until both sides dial down their hawkish rhetoric, markets will continue to pull back earlier optimism,” said DBS Group analysts in a report. “Trade war will be the key driver of sentiment in the immediate few weeks.”

On Wall Street, the benchmark S&P 500 index

SPX, -0.66%

  fell 0.7% to 3,093.20. The Dow Jones Industrial Average

DJIA, -1.01%

  lost 1% to 27,502.81. The Nasdaq

COMP, -0.55%

  dropped 0.6% to 8,520.64.

Negotiators have yet to agree on details of an interim deal that Trump has called “Phase 1” deal.

Investors also are also weighing the potential for additional trade disputes.

On Tuesday, Trump proposed tariffs on $2.4 billion in French products in retaliation for a tax on global tech giants including Alphabet’s

GOOGL, +0.46%

  Google, Amazon

AMZN, -0.65%

  and Facebook

FB, -0.44%

 . That follows a threat Monday to raise tariffs on steel and aluminum from Argentina and Brazil.

Also Wednesday, Australia disappointed investors by reporting third-quarter economic growth declined to 0.4% over the previous quarter from 0.6% in the three months ending in June. The Australian central bank had described the economy as experiencing a “gentle upturn.”

Benchmark U.S. crude

CLF20, +0.80%

  rose 40 cents to $56.50 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 14 cents on Tuesday to close at $56.10. Brent crude

BRNG20, +0.87%

 , used to price international oils, rose 48 cents to $61.30 per barrel in London. It lost 10 cents the previous session to $60.82.

The dollar

USDJPY, -0.05%

  declined to 108.59 yen from Tuesday’s 108.63 yen.

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