Hong Kong, China (AFP) — Asian markets tracked hefty losses in New York on Wednesday owing to growing China-US tensions ahead of fresh trade talks, while the pound remained beaten down by fears Britain is on the verge of crashing out of the EU.

The downbeat mood comes as investors fret over signs the global economy is slowing down, with the International Monetary Fund forecasting the weakest growth in a decade owing to long-running tariff disputes.

Days before high-level negotiations were due to resume, the US announced restrictions on 28 Chinese entities over human rights violations in Xinjiang province and imposed visa restrictions on some officials.

Then Bloomberg News reported unnamed Trump administration officials had said the White House was mulling new measures to curtail US investment in the country.

For its part, Beijing has hit out at the decisions and moved to take steps against the National Basketball Association in a brewing row over a team manager’s remarks on Hong Kong’s protest movement.

“It will be interesting to see how it plays out this week between the US and China,” Andrew Balls, at Pacific Investment Management, told Bloomberg News.

The flare-up comes “at a time when we already see growth pretty weak in the first half of next year and you have at least some evidence of weakness in manufacturing spilling into services.”

While economic data has been increasingly weak in recent months, hopes for this week’s talks have been providing some much-needed support. But the latest developments were a reminder that progress would likely be rocky.

All three main indexes on Wall Street sank and in early trade Hong Kong fell 0.3 percent while Shanghai lost 0.2 percent.

Tokyo went into the break 0.7 percent lower, while Sydney was also off 0.7 percent, Singapore dropped 0.5 percent and Manila lost one percent.

Wellington, Taipei and Jakarta were also in the red.

There was little support from comments by Federal Reserve boss Jerome Powell, who said the US economy would continue to expand but that trade wars and Brexit were causing headwinds.