No more 'Made in HK' for exports to US

Top News | Agence France-Presse 12 Aug 2020

Goods imported from Hong Kong must be marked "made in China" to be sold in the United States as part of Washington's punitive response to a sweeping clampdown on the city.

The Hong Kong government yesterday protested the decision, saying the country ignored the SAR's status as a separate member of the World Trade Organization.

Last month President Donald Trump retaliated to Beijing's imposition of a tough new security law in Hong Kong by removing special trading privileges for the financial hub, which in 2018 sold goods worth US$6.3 billion to the United States.

Among the biggest categories of these imports were electrical machinery, precious metals and stones, and plastics.

"With respect to imported goods produced in Hong Kong, such goods may no longer be marked to indicate 'Hong Kong' as their origin, but must be marked to indicate 'China'," said a draft document from US Customs and Border Protection due to be published yesterday.

Economist Andy Kwan Cheuk-chiu said the latest move indicates that Washington will subject Hong Kong to the same trade war tariffs levied on mainland exporters, as Trump considers Hong Kong the same as any mainland city.

That will lower the competitiveness of Hong Kong manufacturers in the US market as their products get pricier there, he said.

The government is clarifying with the US authorities through the Economic and Trade Office in Washington in order to decide on the way forward.

Danny Lau Tat-pong, honorary chairman of the Hong Kong Small and Medium Enterprises Association, said about US$3.3 billion of goods made in Hong Kong are exported to the US duty-free. Some may have to pay tariffs later.

But even if such tariffs are imposed, the impact on Hong Kong's economy would remain limited. Government statistics showed that out of Hong Kong's HK$304 billion in exports to the US last year, only about 1.2 percent were domestic exports. Almost 80 percent was re-exports from China to the US.

"Hong Kong-made products that export to the US only account for around 0.1 percent of Hong Kong's total export value," said Iron Sze Wing-wai, honorary president of Chinese Manufacturers' Association of Hong Kong.

Relabeling has minimal impact on Hong Kong manufacturers, as many are based on the mainland or Vietnam.

Sze added it will be worst when the US will subject Hong Kong companies to the same tariffs levied on mainland Chinese exporters.

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