Industrial sector takes steps amid threat of US tariffs

Eunice Lam

Hong Kong will surely take a hit if Donald Trump imposes penalty tariffs on Chinese products, but the industrial sector has already been rolling out mitigation measures and adapting to the impending change, says Jimmy Ng Wing-ka.

Industrial sector lawmaker Ng, also the vice president of the Chinese Manufacturers' Association of Hong Kong, said most local enterprises are in the export business, which would inevitably be affected if Trump imposes tariffs on China.

But the US market has been encountering an economic slowdown and had smaller demands on imported goods, he said.

The industrial sector has been adapting to the changes, exploring new markets such as Belt and Road countries and those from the Association of Southeast Asian Nations, Ng added.

"Currently, the US relies on importing daily necessities from China, and I don't think Trump will impose penalty tariffs on every made-in-China product, or it would lead to inflation," he said. But

Ng also expects the tax rates for non-essentials, such as electric vehicles, to rise significantly.

Commercial sector lawmaker Jeffrey Lam Kin-fung said that while Trump is likely to impose harsh tariff policies, he would face opposition from the US business sector. "[Trump] is surrounded by businessmen, many of whom have investments in [China], Hong Kong and even Asia. One of his biggest supporters, Elon Musk, has invested a lot in China," Lam said, adding he was not worried Trump would "turn the world upside down."

Amid Trump's election win, the offshore yuan yesterday morning fell to its weakest in two months.

Carie Li Ruofan, global market strategist at DBS Bank in Hong Kong, said it was a "normal two-way fluctuation of the yuan and US dollar as an immediate response to the presidential election."

"In a one-for-one scenario for Hong Kong dollars and Chinese yuan, the exchange rate of US dollars and Chinese yuan would have to go about 7.75, but now we see that there is already resistance when the rate is around 7.23, so we are not so pessimistic on the economic environment," Li said.

But China-United States Exchange Foundation president James Chau Kin-seng believes it is less likely for Trump to impose harsh tariffs, and the next eight weeks would be crucial when Trump forms his cabinet and plans his future policies.

eunice.lam@singtaonewscorp.com