End of Hong Kong's Special Status to Affect Tariffs, Export Controls, Perhaps Wider China Trade
President Donald Trump said the administration will begin the process of revoking Hong Kong's special status, including the fact that it's treated more leniently than China with regard to “export controls on dual-use technologies, with few exceptions.” He said Hong Kong would no longer be treated as a separate customs territory, but gave no details during a May 29 press conference about how long it would be until the changes take effect.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Sidley Austin customs lawyer Ted Murphy said that while the press conference was short on details, it's still “momentous.” Murphy wrote to clients: “He will be directing his administration to begin the process of eliminating policy exemptions that underpin Hong Kong’s separate status. This will impact all aspects of the US-HK relationship, including immigration, extradition, customs, export controls, etc. ... We expect that an Executive Order will be issued shortly.”
“Will China continue to try to meet its obligations under [the phase one] agreement and, if it does not, will the U.S. increase duty rates/impose additional duties? Time will tell, but the prognosis for the US-China trade relationship is not good,” he wrote.
The editor in chief of a nationalist Chinese paper, Global Times, mocked Trump's claim that the U.S. would have a powerful response to the national security law's imposition in Hong Kong ahead of the announcement. “Canceling Hong Kong's separate customs territory status is not 'powerful,' and China has long been prepared for that,” he tweeted.