Doubts over sting of US measures

Top News | 3 Jul 2020

US Secretary of State Mike Pompeo says the new security law is an affront to all nations and Washington will continue to implement President Donald Trump's directive to end the territory's special status.

Pompeo told a news briefing the United States is deeply concerned about the safety of everyone in Hong Kong and said Article 38 of the law purports to apply to offenses committed outside Hong Kong and probably includes Americans.

"This is outrageous and an affront to all nations," he said.

"Free Hong Kong was one of the world's most stable, prosperous and dynamic cities. Now it will be just another communist-run city where people will be subject to the party elites' whims."

Asked how far Washington would go in stripping Hong Kong of its US privileges, Pompeo said: "I'll just repeat what the president said: He wants to ensure that, with a handful of exceptions, Hong Kong is treated just like mainland China."

But some analysts doubt the willingness of the Trump administration to take forceful action that would have an impact on Beijing, given extensive US business interests in Hong Kong and Trump's desire to maintain a trade deal reached with China this year.

"While there are a range of options for further US sanctions, including tariffs, visas and air travel, none are cost-free to US interests," said Wendy Cutler, a former US trade official.

Kurt Tong, the former US consul general in Hong Kong, said it is difficult to craft responses that do not hurt Hong Kong or the United States more than they hurt China.

"I do expect President Trump to raise tariffs on Hong Kong exports, since he has already said as much. Still, such actions are unlikely to deter Beijing," he said.

"More dramatic options, such as somehow attacking Hong Kong's policy of pegging its currency to the US dollar, do not seem practical."

Pompeo also highlighted a US business advisory warning about "reputational, economic and legal risks" of doing business with entities linked to abuses in China's Xinjiang region.

At the same time, the US House of Representatives passed legislation that would penalize banks doing business with Chinese officials who implement the security law. The US Senate passed similar legislation last week, but under congressional rules the bill must return to the Senate and be passed there before being sent to the White House for Trump to sign into law or veto.

China responded by saying the United States should stop interfering in Hong Kong affairs and warned that it would resolutely and forcefully resist.

British Foreign Secretary Dominic Raab reprimanded HSBC and other banks for supporting the new law, saying the rights of Hong Kong should not be sacrificed for bankers' bonuses.

House Speaker Nancy Pelosi made an unusual appearance at a committee hearing on the situation in Hong Kong to say the security law marked the death of the one country, two systems principle.

REUTERS

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