Trump Announces Decision to End Hong Kong’s Special Economic Status
President Donald Trump announced on Friday that he will begin to take steps to end Hong Kong’s privileged trade status with the United States in response to a controversial new security law passed by the Chinese parliament (National People’s Congress, NPC) that will effectively ban political protest in Hong Kong.
«I instruct my administration to begin the process of removing the political exceptions that grant Hong Kong special economic status and special treatment», – said Donald Trump (Donald Trump) during an event in the Rose Garden at the White House.
«My announcement today will impact the full range of agreements we have with Hong Kong, from our extradition treaty to our export controls and technology.», – Trump said. «We will take steps to end the preference regime for Hong Kong as a separate customs and tourist area from the rest of China».
The change in Hong Kong’s status immediately threatens some aspects of the former British colony’s relationship with the United States, which so far has meant Hong Kong has been spared the increased trade tariffs that are a cornerstone of Trump’s trade war with Beijing..
But Trump did not provide details on exactly what steps would be taken or in what order, and a White House spokesman declined to provide further clarification on the expected steps..
Trump also said he was ready to take steps to ensure that Chinese and other foreign companies listed on the US financial exchanges comply with US accounting and auditing standards..
This issue has long pissed off politicians in Washington, DC, some of whom have initiated legislation that would prohibit trading in any stock in which the company’s auditor has not been audited by the Public Company Accounting Oversight Board (PCAOB) in for three consecutive years.
Trump did not say if he would sign the bill, which is currently under consideration in Congress..
However, on Friday, the president said he would instruct his «the presidential working group on financial markets to study the various practices of Chinese companies registered in the US financial markets with the aim of protecting US investors».
«Investment companies should not expose their clients to the hidden and unjustified risks associated with financing Chinese companies that do not play by the same rules», – Trump said, adding that «Americans have a right to fairness and transparency».
In the same address, Trump also announced that the United States would end its relationship with the World Health Organization, which has already drew criticism from public health experts and US allies..
The President said the organization did not conduct «requested and badly needed reforms», and blamed the global health group for failing to «transparency».
He said that will also issue a proclamation to better protect vital university research by suspending the entry of foreign nationals from China who would be viewed as potential threats to national security. This measure could affect 3,000 to 5,000 Chinese graduate students.
Financial markets reacted positively to Trump’s announcement, expressing general relief that he had not announced some of the more drastic and punitive measures that analysts and investors feared he might do. The implication was that they would include additional tariffs on Chinese goods, new massive sanctions and withdrawal from the US-China trade agreement..
Donald Trump announces end to Hong Kong’s special trade status
For weeks, the Trump administration has been stepping up pressure on Beijing over its alleged cover-up of early coronavirus cases. Trump has publicly blamed China for the origin of the virus itself and for its enormous devastating impact on the United States.
Beijing, in turn, has suggested that the virus originated in US military personnel, but this assumption is widely dismissed by international health experts..
Last week, however, pressure from the United States became more serious in response to a proposed China security law that threatens Hong Kong’s long-standing semi-autonomy. The law, officially approved on Thursday by the NPC (China’s People’s Congress), will criminalize most forms of political protest under a general ban on «mutiny» and «subversive activities».
Wednesday Secretary of State Mike Pompeo presented a report to Congress stating that Hong Kong is no longer a Chinese autonomy.
«No reasonable person today can claim that Hong Kong retains a high degree of autonomy from China, given the facts on the ground.», – said Pompeo in a statement accompanying the report.
Although relations have grown more hostile, Trump has been reluctant to take action against China that could turn a strained bilateral relationship into direct confrontation..
As president, Trump is well aware of the US’s interdependence with China as a market for US exports and a supplier of manufactured goods. He also still believes that his bargain «first phase», signed in January, can and will be seen as one of the key moments of his presidency, fulfilling a key campaign promise he made in 2016.