Hong Kong faces a new spate of restrictions after Trump signed two executive orders yesterday, which will end the city’s preferential trade status with the US. “Hong Kong will now be treated the same as mainland China,” Trump told reporters in a press conference yesterday. “No special privileges, no special economic treatment, and no export of sensitive technologies.”
Sanctions on foreign individuals and banks who have significant dealings with identified individuals and entities, or contribute to China’s failure to preserve Hong Kong’s autonomy will also be imposed under the Hong Kong Autonomy Act. “This law gives my administration powerful new tools to hold responsible individuals and entities involved in extinguishing Hong Kong’s freedom,” Trump stated.
In response, China’s foreign ministry criticised Trump’s move to sign the Act into law as a violation of international relations norms and a serious interference in China’s internal affairs. They further threatened retaliatory measures, stating that, “To protect its legitimate interests, China will take necessary action to impose sanctions against related US institutions and individuals.”
Trump’s strong foreign policy stance comes in response to Hong Kong’s new national security law imposed by Beijing earlier this month, which has been criticised for undermining the city’s constitutionally-guaranteed autonomy and freedom. China-US relations have continued to fray in light of US threats to unpeg the Hong Kong dollar and delist Chinese companies.
Although there has been no mention of when Hong Kong’s new trade status would go into effect, and the text of the directive has not been released yet, there have been speculations the move could subject Hong Kong to the same US tariffs imposed on Chinese exports.
Karishma Vaswani, BBC’s Asia business correspondent, anticipates the uncertainty may prompt mainland Chinese firms to relocate their export-based operations away from Hong Kong, which would negatively affect the city’s logistics and export sectors. As for American and multinational companies, she remains optimistic: “The structural reasons for why a company would use Hong Kong as a hub are still there – low tax rates, good geographic location, convertibility of currency.”