Donald Trump ends Hong Kong's preferential status citing Beijing's 'oppressive' actions against city

Acting on a Tuesday deadline, Trump also signed a bill approved by the US Congress to penalize banks doing business with Chinese officials who implement the new security law.

Reuters July 15, 2020 09:13:56 IST
Donald Trump ends Hong Kong's preferential status citing Beijing's 'oppressive' actions against city

Washington: President Donald Trump on Tuesday ordered an end to Hong Kong’s special status under US law to punish China for what he called “oppressive actions” against the former British colony.

Citing China’s decision to enact a new national security law for Hong Kong, Trump signed an executive order that he said would end the preferential economic treatment Hong Kong has received for years.

“No special privileges, no special economic treatment, and no export of sensitive technologies,” he told a news conference.

Acting on a Tuesday deadline, he also signed a bill approved by the US Congress to penalize banks doing business with Chinese officials who implement the new security law.

“Today I signed legislation, and an executive order to hold China accountable for its aggressive actions against the people of Hong Kong, Trump said.

“Hong Kong will now be treated the same as mainland China,” he added.

The executive order calls for blocking the US property of any person determined to be responsible for or complicit in “actions or policies that undermine democratic processes or institutions in Hong Kong,” according to the text of the document released by the White House.

It also directs officials to “revoke license exceptions for exports to Hong Kong,” and includes revoking special treatment for Hong Kong passport holders.

Critics of the security law fear it will crush the wide-ranging freedoms promised to Hong Kong when it returned to Chinese rule in 1997, while supporters say it will bring stability to the city after a year of sometimes violent anti-government protests.

The security law punishes what Beijing broadly defines as subversion, secession, terrorism, and collusion with foreign forces with up to life in prison.

US relations with China have already been strained over the global coronavirus pandemic, China’s military buildup in South China Sea, its treatment of Uighur Muslims, and massive trade surpluses.

Trump’s handling of the coronavirus pandemic has raised doubts about whether he can win re-election on 3 November amid a surge of new infections. He has attempted to deflect blame onto China.

“Make no mistake. We hold China fully responsible for concealing the virus and unleashing it upon the world. They could have stopped it, they should have stopped it. It would have been very easy to do at the source when it happened,” he said.

Asked if he planned to talk to Chinese President Xi Jinping, Trump said: “I have no plans to speak to him.”

Double-edged sword?

In rambling remarks, Trump spent much of his Rose Garden appearance criticizing Democratic presidential rival Joe Biden.

Both candidates are constrained from active campaign rallies by the virus and fear that participants could be infected.

Ending Hong Kong’s special economic status could be a double-edged sword for the United States.

Hong Kong was the source of the largest bilateral US goods trade surplus last year, at $26.1 billion, based on US Census Bureau data.

Analysts say that completely ending Hong Kong’s special treatment could prove self-defeating for the United States, which has benefited from the territory’s business-friendly conditions.

According to the State Department, 85,000 US citizens lived in Hong Kong in 2018 and more than 1,300 US companies operate there, including nearly every major US financial firm.

The territory is a major destination for US legal and accounting services.

The United States began eliminating Hong Kong’s special status under US law in late June, halting defense exports and restricting the territory’s access to high-technology products as China prepared to enact the security legislation.

In May, Trump responded to China’s plans for the security law by saying he was initiating a process to eliminate the special economic treatment that has allowed Hong Kong to remain a global financial center.

He stopped short then of calling for an immediate end to privileges but said the moves would affect the full range of US agreements with Hong Kong, from an extradition treaty to export controls on dual-use technologies.

A US official, speaking on condition of anonymity, said the administration was also preparing sanctions against Chinese officials and entities involved in the Hong Kong crackdown, including further US travel bans and possible Treasury sanctions.

The timing remained unclear. The White House has previously threatened such sanctions but so far has only imposed restrictions on visas for an unspecified number of unnamed Chinese officials.

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