On June 10, 2020, Ashley Craig and Lindsay Meyer were quoted in Inside U.S. Trade discussing President Trump’s May 29 announcement that Hong Kong would lose its special trade status, possibly subjecting it to the Section 301 tariffs the U.S. has imposed on China as well as the same export control restrictions.
According to the article, the announcement came days after Secretary of State Mike Pompeo notified Congress that Hong Kong was no longer autonomous from mainland China. Pompeo’s announcement and Trump’s promise to revoke the city’s special trade status were in part responses to a national security law Beijing has said it will impose on Hong Kong.
The administration’s lack of action since announcing Hong Kong would lose its special status, however, suggests the possibility that the two sides could back down to some degree, according to Craig. He suggested China could soften its stance on the national security law and the Trump administration could preserve Hong Kong’s trade status, for now.
Meyer said the administration was likely to wait to see how far-reaching China’s national security law is before acting. The law has not been revealed and China has not said how it will be enforced, Meyer noted, contending this uncertainty leaves the U.S. and China in “a bit of a cat-and-mouse game right now.”
If the U.S. does revoke Hong Kong’s special trade status, it could compel Beijing to forgo any appearance of adhering to the “one country, two systems” principle governing how most of the world views the relationship between the city and China, Craig said. Beijing might see no advantage in keeping Hong Kong separate if it does not enjoy special trade status, which would make revoking that status counterproductive if the U.S. objective is to preserve the “one country, two systems,” he added. Whether U.S. allies support its approach to Hong Kong will be factor in whether China attempts to uphold the image of Hong Kong’s autonomy, Craig said.