LONDON—The British government suspended its extradition treaty with Hong Kong in response to Beijing’s decision to impose a new security law on the former British colony, the latest sign of deteriorating diplomatic relations between Western nations and China.

British Foreign Secretary Dominic Raab told Parliament on Monday that the extradition treaty would be suspended indefinitely and that the U.K. would bar arms sales to Hong Kong, ratcheting up pressure over what the British government says is a draconian security law.

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