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New Tariffs on Goods From Hong Kong

Under national security law: Hong Kong’s US exports to be relabelled ‘Made in China’ starting September 15.

The move, in accordance with the suspension of the Hong Kong Policy Act of 1992 and the invoking of US President Donald Trump’s executive order on “Hong Kong Normalisation”, will see Hong Kong companies subjected to the same trade war tariffs levied on mainland Chinese exporters, should they make products subject to these duties.

The move is “due to the determination that Hong Kong is no longer sufficiently autonomous to justify differential treatment in relation to China”.

The main drawback is US corporations will no longer be able to sell some exports to Hong Kong. 

Analysts have said that the more significant among the flurry of US trade actions against Hong Kong in recent weeks has been the rolling out of export controls, which means importers in the city cannot access certain sensitive American technology. This could hamper university research and even access to consumer technology, analysts and industry figures have warned.

Trumpian Logic in Question

Once again we have a peculiar Trumpian security setup.

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If selling "sensitive" goods to Hong Kong is a security risk, it already was a security risk.

The Chinese crackdown on Hong Kong did not change any security risks. 

If there was no security risk last year, there is none now. If there is a risk now, the same risk existed a year ago.

Hong Kong Distances From US Suppliers 

Arthur Lee Kam-hung is the CEO of Hong Kong X’tals, a manufacturer of hi-tech components used in 5G base stations and autonomous vehicles. His firm sells some products out of Hong Kong, but he said the new rules will not affect him much, since the company has already distanced itself from an “outdated” and “volatile” American market.

Lee added that the trade war made him diversify some material sourcing away from the US, but that Trump's policies and sanctions make him “very worried” about dealing with the US. “We will hold off on any investment or sourcing on the US market,” he said.

Trump already drove Hong Kong importers away from US producers. 

We call this a "Win".

Mish