United States President Donald Trump announced on Friday that he plans to begin
stripping Hong Kong of its special trading status, but left many important questions about the city’s future as a financial and commercial hub unanswered.
The move will affect “the full range of agreements” the US has with Hong Kong “with few exceptions”, including its extradition treaty with the city and economic privileges enshrined in US law that differentiate it from mainland China, Trump said in the Rose Garden at the White House.
With Hong Kong mainly serving as an entrepôt for the mainland Chinese market, direct trade in goods forms only a minor part of the economy. Its own manufactured goods could be subjected to US trade war tariffs, but the effect would be minimal.
Hong Kong’s government had anticipated “all the different scenarios” of Trump’s announcement, said Hong Kong Finance Secretary Paul Chan Mo-po, adding that revoking the city’s special treatment status would have little impact as the local economy was dominated by the services sector.
Potential controls on access to American tech goods may also damage China’s plan to use Hong Kong as an R&D and financial spoke of its Greater Bay Area blueprint for South China.
Taken to its full potential, Hong Kong will lose its special customs status, but remain a free port and World Trade Organisation member, meaning it will continue to trade on most-favoured-nation terms with the United States.