In September 2019, a “Section 301” list subjected many Chinese consumer products, including diamonds and jewelry, at a U.S. rate of 15%, which was lowered to 7.5% in February as a result of the Phase 1 trade agreement with China. U.S. companies oppose any change in Hong Kong`s recognition as a sufficiently autonomous city in Washington, where large U.S. companies have access to China and Southeast Asia and where bilateral trade flourishes in different parts of the economy, from wine to financial services. The U.S. trade surplus with Hong Kong is the largest with a U.S. trading partner, with a surplus of $31 billion in 2018, mainly due to imports of U.S. aircraft and space vehicle incongs, electric machinery, pearls, gold, diamonds, works of art, meat, fruit and nuts. America`s services exports to Hong Kong reached $12.8 billion in 2018. In addition, the United States remains one of the main sources of foreign direct investment in Hong Kong. “This will not be a devastating blow to Hong Kong`s economy,” said Claire Reade, senior counsel at Arnold and Porter in Washington.
It added that much of Hong Kong`s exports have shifted to services. “Hong Kong has had a special trading relationship with different types of tariffs and regulations that have allowed it to act more freely, including capital markets,” said Dr. Rebecca Harding, independent trade specialist and CEO of Coriolis Technologies. The bill that repeals Hong Kong`s special trade status appears to be unanimously approved in Washington DC – something Beijing will take a closer look at when the Trump administration makes the final rounds before the fall election. Perhaps it is no longer enough to wait for a new government to occupy the White House next year. Despite this, in recent years, Beijing has focused its diplomatic efforts on better economic relations with countries in Africa, Europe, the Middle East and South America, many of which participate in the Belt-Road Initiative, alongside ASEAN and South Asia. Trump`s order does not immediately affect U.S. annual exports to Hong Kong, which are largely duty-free, or Hong Kong`s $30-40 billion independent WTO membership. However, threats of retaliation from China could curb the sale of U.S.
products in that country in the future, trade experts say. Hong Kong is one of the world`s leading trading areas. In 2018, it became with the Elle7. Highest trading volume, with a total value of nearly 1.2 tn. 30 In addition, the EPA is the first bilateral trade agreement signed by Hong Kong. Another agreement is being negotiated with New Zealand. While the Hong Kong authorities do not question the priority given to multilateral negotiations, they make no secret of their willingness to participate, like Singapore, in the dissemination of bilateral and regional agreements to improve the image of the RAD as a regional commercial market. In addition, the decision will suspend the extradition of fugitive offenders between the United States and Hong Kong, end international education exchange programs, such as the Fulbright China-Hong Kong exchange program, and end the training of U.S.
police and security officers in Hong Kong.