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Not Made in Hong Kong, but Made in China – Trump uses China’s official Hong Kong line to choke it economically

Another major blow to China

Yash Joshi by Yash Joshi
12 August 2020
in Economy1
trump hong kong china
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The inevitable has finally happened as the city of Hong Kong after years of resisting the Chinese Communist Party has fallen due to the National Security Law which effectively strips the region off its last remaining autonomy. As the CCP integrates the island territory with the mainland, the US is acting tough on the city in a bid to choke it economically as in a fresh move, the US has declared that Hong Kong now falls under the complete rule of China, hence it should be treated just like Mainland China in business dealings. The city’s exports to the US will now be relabelled as ‘Made in China’ which would mean that the city’s good will now be caught in the US-China trade war which has the potential to act as the death knell to Hong Kong’s beleaguered economy.

Apart from China’s blind expansionist policy where it wants to occupy anything and everything, one of the main reasons which lured China to the Hong Kong was the city’s financial prowess as over the years it had emerged as the financial capital of the world. Even during the US-China trade war, exports from Hong Kong were spared by the US as the latter didn’t apply trade war level duties on the city’s goods. Xi Jinping perhaps envisioned that occupying Hong Kong would reinvigorate China’s flagging economy, but the Trump administration is making sure that by the time China completes fully integrating Hong Kong, the region will be nothing but a ghost city.

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According to a US government notice, Hong Kong manufactured goods which are to be exported to the US will now be relabelled as ‘Made in China’ after September 25. This move comes close on the heels of Trump’s decision to suspend the Hong Kong Policy Act of 1992 thereby revoking the different and preferential treatment for the city.

According to the notice, Hong Kong’s goods “must be marked to indicate that their origin is ‘China’”. The move is “due to the determination that Hong Kong is no longer sufficiently autonomous to justify differential treatment in relation to China”. The Trump administration has also decided levy a heavy punishment for goods failing to comply to the notice as the goods not adhering to the change will face a punitive 10 per cent duty at US ports.

This is a devastating blow for Hong Kong as the city’s goods are now facing punitive US duties due to the ongoing trade war between the US and China. Over the years, “Made In China” had become the symbol of cheap, low quality products which cannot be trusted to work for a long duration. The perception only worsened as the world battles the China made pandemic with calls for boycotting Chinese goods increasing manifold across the world. Now, Hong Kong produced goods will be humiliated as they will also now be labelled as “Made In China” and will also face the threat of being boycotted.

It is important to note that Hong Kong has a higher trade deficit with the US than with any other economy with a deficit of $26 billion even after a 16% drop last year.

The Hong Kong administration is looking to knock the doors of the World Trade Organisation as in its statement it claimed that, “If necessary, Hong Kong Special Administrative Region will not rule out taking actions in accordance with WTO rules to safeguard Hong Kong’s interests” as this move “reflected the US’ disregard for Hong Kong’s status as a separate member of the WTO”, adding that the ruling “may not comply with WTO regulations”.

The CCP which browbeats countries to accept the “One China policy” is now ironically crying over the fact that the US is treating the island territory as an integral part of China. It seems that President Trump has outplayed China in its own game.

Hong Kong’s administration is now arresting pro-democracy leaders like Jimmy Lai with the Trump administration sanctioning leading Hong Kong officials including Chief Executive Carrie Lam over their role in imposing the national security law.

Hong Kong’s economy has shrunk by over 9% in each of the first two quarters of 2020 and Trump’s recent move will severely impact an already ailing economy.

Tags: #USAChinaDonald TrumpHong Kong
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