Last year, the US passed a law that requires Hong Kong to retain independence to qualify for the continued favorable trading terms with the US. I mentioned this in my blog post on June 15th, 2019 here.
The bill requires the US Secretary of State to certify each year that Hong Kong remains autonomous from China. If Hong Kong does not pass the certification of independence from China, then Hong Kong would lose trade privileges with the US (goods from Hong Kong will now be subject to duties on goods from China).
Fast forward almost a year later – where in late May China’s central government passed a national security law to apply to Hong Kong (as Hong Kong has not been able to pass such a law since they were handed back to China in 1997). The new security law would ban secession, subversion of state power, terrorism, foreign intervention and allows mainland China’s state security agencies to operate in the city.
After passage of the security law, Secretary of State Mike Pompeo told Congress that Hong Kong was no longer independent from China – signaling a potential move towards Hong Kong not passing certification.
If Hong Kong loses it’s special status a big impact would be on tariffs on goods from Hong Kong would now apply. This would impact over $66 billion in trade according to 2018 trade numbers. In 2018, Hong Kong was America’s third-largest market for wine, 4th largest for been and seventh largest for agricultural products.
If you have any questions how your imports or exports to and from Hong Kong may be impacted, contact David Hsu 24/7 by phone/text to 832-896-6288 or by email at firstname.lastname@example.org.