Hong Kong, which is known as an autonomous and attractive place to do business, may change the world’s perception brought about by China’s pressure.
On May 27, U.S. Secretary of State Mike Pompeo told Congress that Hong Kong was no longer independent from China, given that the proposed law would completely bypass the city’s legislature.
However, due to recent developments, China has approved its proposal to impose its national security law over Hong Kong and things could look ugly for the U.S. moving forward.
*CHINA'S PARLIAMENT APPROVES CONTROVERSIAL NATIONAL SECURITY BILL FOR HONG KONG DESPITE FIERCE PROTESTS AND WARNINGS FROM U.S. PRESIDENT TRUMP pic.twitter.com/1fIKqVES7k
— Investing.com (@Investingcom) May 28, 2020
This law will bring a huge impact on U.S. trade with Hong Kong
A recent report from the Office of the U.S. Trade Representative (USTR) suggests that the U.S. goods and services trade with Hong Kong totaled more than US$66 billion [AU$99.8 billion] in 2018, with imports and exports totaling US$16.8 billion and US$50.1 billion, respectively.
If tariffs are imposed, then Hong Kong’s trade with the U.S. would undergo a significant impact.
In addition, a recent report from Hong Kong’s trade and industry department, America was considered as its second-largest trading partner in the world, with bilateral merchandise trade increased by 8.1% in 2018.
Hong Kong a ‘pawn’ in the U.S.-China trade war
Singaporean ex-diplomat claims that Hong Kong has been stuck in between the crossfires due to the escalating rivalry between the two economic superpowers.
Kishore Mahbubani, a distinguished fellow at the National University of Singapore’s Asia Research Institute told CNBC’s Squawk Box Asia:
“There will be no all-out war between China and the U.S. […] But at the same time, I think other countries have to be very, very careful because there can be proxy wars and that’s what superpowers do, they use other people as pawns.”
He further adds that Hong Kong has now become a pawn in the geopolitical chessboard between the U.S. and China and it looks like the chaos is about to unfold.
Not the first time the U.S. and China sparred over Hong Kong
America and China go way back before the coronavirus pandemic. Last year, months of widespread pro-democracy protests sparked in Hong Kong which led the U.S. to enact two new laws to prevent Beijing’s influence and interference in the city.
These two laws were introduced to preserve Hong Kong’s rights and autonomy, however, one of the laws actually contain provisions that could end up hurting the economies of the U.S., China, and Hong Kong.
Featured image courtesy of tee2tee/Pixabay