Excerpts: The end of agreements on taxation, currency exchange, and sanctions; and law enforcement cooperation, like extradition, could sink the estimated $66.8 billion of trade between the U.S. and Hong Kong, imperil the offices hundreds of U.S. companies have there and spell the death of Hong Kong’s status as an international financial capital.
Trump admin tells Congress Hong Kong has lost its autonomy to China. Here’s what that means.
Hong Kong’s special status is threatened by China’s new national security law.
28 May 2020, 05:5410
The certification from the State Department marks a dramatic turning point for the territory as the Chinese government moves to implement a series of national security laws that it says is aimed to outlaw secession, subversion and foreign interference in Hong Kong, but that critics see as the death knell of the “one country, two systems” that makes the territory unique.
The change in policy position does not yet have any effect, but it lays the legal groundwork for President Donald Trump to take executive actions to terminate Hong Kong’s special status under U.S. law, including looser export controls than mainland China; agreements on taxation, currency exchange, and sanctions; and law enforcement cooperation, like extradition.
The end of those agreements could sink the estimated $66.8 billion of trade between the U.S. and Hong Kong, imperil the offices hundreds of U.S. companies have there and spell the death of Hong Kong’s status as an international financial capital./
“Changing Hong Kong’s status will not only undercut Hong Kong’s exports and harm its economy, but also invite Chinese retaliation, like changing the rules benefiting U.S. firms there. Mainland China will suffer a bit but probably not enough to substantially change Beijing’s calculus,” said Benjamin Friedman, policy director for Defense Priorities, a libertarian think tank in Washington.
Hong Kong Has Lost Autonomy, Pompeo Says, Opening Door to U.S. Action
The State Department announcement comes as President Trump weighs hard measures against China, which is expected to approve a national security law on Hong Kong on Thursday.
By Edward Wong
- May 27, 2020Updated 11:27 p.m. ET
WASHINGTON — Secretary of State Mike Pompeo announced on Wednesday that the State Department no longer considered Hong Kong to have significant autonomy under Chinese rule, a move that indicated the Trump administration was likely to end some or all of the United States government’s special trade and economic relations with the territory in southern China.
Mr. Pompeo’s action came just hours before China was expected to pass a national security law that would allow Chinese security agencies to take broad actions limiting the liberties of Hong Kong residents, many of whom have protested the proposed law and clashed with police officers.
The United States and China appear to be on a collision course over the future of Hong Kong, a center of global capitalism and symbol of resistance to the Chinese Communist Party. Relations between the two nations are at their worst in decades, and disputes have flared over trade, national security and the origins of the coronavirus.
If it proceeds with punishments, the Trump administration could impose the same tariffs on exports from Hong Kong that it puts on goods from mainland China, said officials with knowledge of the discussions. Other trade restrictions that apply to China, including bans or limits on what American companies can sell to Chinese companies because of national security or human rights concerns, may be imposed on Hong Kong as well.
Some of Mr. Trump’s advisers are discussing visa bans on Chinese officials who enact the law.