Daily Management Review

National Security Law Reaction: US To Label Exports From Hong Kong As “


The United States government has issued a notice to put the label of “Made in China” for all good that are manufactured or produced in Hong Kong and exported to the US from September 25.
This means that companies of Hong Kong would have to face the same rate of tariffs for us exports that are applicable currently to companies in Mainland China.
According to analysts this move by the administration of the US president Donald Trump was in line with the US previously suspending the Hong Kong Policy Act of 1992 and invoking of Trump’s executive order on “Hong Kong Normalisation” as reactions to the imposition of the controversial national security law by China on Hong Kong in July.
The notice published by the US Federal Register on August 11 said that “45 days after the date of publication”, goods “must be marked to indicate that their origin is ‘China’”. It also said that the move is “due to the determination that Hong Kong is no longer sufficiently autonomous to justify differential treatment in relation to China”.
For the already struggling Hong Kong economy, this move by the Trump administration is another blow as well as for the high-value, low-volume base of exporters from the city. Goods that fail to comply will face a punitive 10 per cent duty at US ports.
It was mulling filing a claim at the World Trade Organisation (WTO) as Hong Kong is a separate member of the global organization, said the Hong Kong government in a statement on Tuesday. It also accused the US of sowing “confusion and harming the interests of all parties, including the United States itself”.
The m over by the Trump administration to reclassify Hong Kong’s exports “reflected the US’ disregard for Hong Kong’s status as a separate member of the WTO”, the statement said and added that the ruling “may not comply with WTO regulations”.
“If necessary, Hong Kong Special Administrative Region will not rule out taking actions in accordance with WTO rules to safeguard Hong Kong’s interests,” the statement further said.
The trade surplus for Hong Kong with the US is greater than any other economy even though it slid by 16 per cent last year, to $26 billion. There was a 23 per cent year on year drop in exports from Hong Kong to the US between January and May this year.
Hong Kong is more used as a hub for re-exporting instead of direct trading. Compared to the 1970s and ’80s, when it was a manufacturing stronghold, the character of the economy of Hong Kong has changed significantly. Currently only about 1 per cent of the total goods shipped out of Hong Kong are made in the city and instead it acts as a logistical gateway for companies of mainland China for exporting as well as importing.
According to data from the city’s Trade and Development Council, in 2019, domestic exports to the US was worth $471 million which was equivalent to 0.1 per cent of total outbound shipments including re-exports.