US says HK no longer enjoys autonomy from ChinaTop News | Sophie Hui 29 May 2020
The idea of the United States taking hard action against Hong Kong - specifically economic measures - was not causing any notable shaking yesterday amid a cacophony of concerns being bandied about of fallout from the National People's Congress.
Indeed, the general view was that the SAR can ride out a storm.
The topic was bubbling after US Secretary of State Mike Pompeo told Congress that Hong Kong no longer enjoys a high degree of autonomy from China, and the Trump administration could suspend the SAR's preferential tariffs rates for exports as part of its response to Beijing legislating a national security law for Hong Kong.
That will hit the SAR's domestic exports to America as they may no longer enjoy tariff preferences.
The United States imposed 25 percent tariffs on US$250 billion (HK$1.94 billion) of imports from China.
According to the Trade and Industry Department, the value of domestic exports to the United States in 2019 was HK$3.67 billion, accounting for 9 percent of all domestic exports.
Yet US imports to Hong Kong totaled HK$212.9 billion, and Hong Kong re-exports to the United States totaled HK$300 billion.
The United States has always enjoyed a substantial trade surplus with Hong Kong. It reached US$31.1 billion in merchandise trade over the SAR in 2018.
That year also saw Hong Kong as the United States' third-largest export market for wine, fourth for beef and seventh for all agricultural products.
Danny Lau Tat-pong, honorary chairman of the Hong Kong Small and Medium Enterprises, said there would not be a significant direct impact to enterprises if Washington canceled the separate customs status.
It could also lead the WTO to alter the SAR's special status.
And if advanced technology could not be exported to Hong Kong, he added, local firms would find it difficult to find replacement products.
Liberal Party legislator Felix Chung Kwok-pan said the SAR's business sector is concerned Washington will strip Hong Kong of its special status.
But Executive Councilor and New People's Party legislator Regina Ip Lau Suk-yee does not believe a suspension of special treatment for Hong Kong will have much of an impact, citing the US trade surplus with Hong Kong of more than US$26 billion last year.
Ip said too she is not worried about possible US sanctions on top officials and legislators in Hong Kong as they do not meet the sanctions threshold.
Also, she said, it was the NPC involved in legislating the security law for Hong Kong "and officials in Hong Kong did not take the lead."
She added: "If America freezes assets or refuses to issue visas, those assets can be sold, while not going to America would not be a big loss for us."
Terence Chong Tai-leung, a Chinese University of Hong Kong associate professor of economics, does not believe the WTO would kick the SAR out of the organization as it is a free port.
Also, he said, "the WTO is not that political, and Hong Kong follows WTO regulations."
Demosisto believes the United States could be considering partial economic sanctions under an act adopted to punish nations like North Korea and Iran.
Such sanctions would put pressure on "red capital" from the mainland in Hong Kong, the party said.
The party's secretary general, Joshua Wong Chi-fung, believes President Donald Trump will make the decision on whether to cease the SAR's separate customs status in one to two weeks.
But he does not believe it will not have much impact for Hongkongers applying for US visas for study or travel.