China has pledged to retaliate after US President Donald Trump ended Hong Kong's preferential trade status and imposed sanctions on Chinese officials over the territory's new security law. Beijing condemned the decision as 'gross interference' in its domestic affairs and said it would impose sanctions on relevant US individuals and entities.
Mr Trump's executive order revokes Hong Kong's special economic treatment, including preferential trade status agreed in 1984 when the territory was still a British colony. Hong Kong goods will now be subject to the same tariffs as those from mainland China. The president also signed the Hong Kong Autonomy Act, which penalises banks doing business with Chinese officials involved in implementing the security law.
The security law, which effectively outlaws criticism of the Chinese government, is the most significant change to Hong Kong's political landscape since the UK handed over sovereignty in 1997. Mr Trump said his actions were intended to 'hold China accountable for its aggressive actions against the people' of Hong Kong.
China's foreign ministry stated that the US attempt to obstruct the national security law 'will never succeed' and urged Washington to correct its mistakes. The ministry warned that if the US goes ahead with its measures, China 'will firmly respond'.
The end of Hong Kong's special status is expected to affect its role as a re-exporting hub, potentially harming port and logistics businesses. However, structural advantages such as low tax rates and currency convertibility may maintain Hong Kong's appeal for multinational companies.
