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Trump says he has ended preferential treatment for Hong Kong Trump says he has ended preferential treatment for Hong Kong
(about 2 hours later)
US President Donald Trump has signed an order to end preferential treatment for Hong Kong, as his administration adopts an increasingly tough stance on China.US President Donald Trump has signed an order to end preferential treatment for Hong Kong, as his administration adopts an increasingly tough stance on China.
"Hong Kong will now be treated the same as mainland China," the president told reporters at the White House."Hong Kong will now be treated the same as mainland China," the president told reporters at the White House.
Mr Trump said he had also signed bipartisan legislation to impose sanctions on Chinese officials who crack down on rights in Hong Kong.Mr Trump said he had also signed bipartisan legislation to impose sanctions on Chinese officials who crack down on rights in Hong Kong.
The US has been paring back Hong Kong's special status over the last few weeks. The ex-British colony enjoys unique freedoms not seen in mainland China.
"No special privileges, no special economic treatment and no export of sensitive technology," Mr Trump said in Tuesday's news conference at the White House, as he outlined an executive order that he previewed back in May. But many people in the territory fear a new security law imposed by Beijing will bring an end to Hong Kong's special status, agreed under a 1984 pact between China and the UK.
The territory, a former British colony, enjoys unique freedoms not seen in mainland China.
But many people there see a new security law imposed by Beijing as bringing an end to Hong Kong's special status, agreed under a 1984 agreement between China and the UK.
The legislation - which outlaws criticism of China's government - is the most sweeping change to the political landscape of Hong Kong since it was handed back to China by the UK in 1997.The legislation - which outlaws criticism of China's government - is the most sweeping change to the political landscape of Hong Kong since it was handed back to China by the UK in 1997.
Speaking in the Rose Garden, Mr Trump also said he had signed the Hong Kong Autonomy Act, which passed unanimously in Congress earlier this month. What did President Trump say?
He told reporters it would hold China accountable for what he called the "oppressive" national security law it imposed on Hong Kong. Speaking in the Rose Garden, Mr Trump said his executive order would end preferential treatment for Hong Kong.
Mr Trump also said when asked by a journalist that he had no plans to speak to Chinese President Xi Jinping. "No special privileges, no special economic treatment and no export of sensitive technologies," said the president, who first announced in May that his administration would begin paring back the territory's special status.
What would ending Hong Kong's special status mean? He also told reporters he had signed the Hong Kong Autonomy Act, which passed unanimously in Congress earlier this month.
The move could cause a major corporate headache for more than 1,300 US companies that operate in the territory. "This law gives my administration powerful new tools to hold responsible the individuals and the entities involved in extinguishing Hong Kong's freedom," Mr Trump told the news conference.
US citizens who currently enjoy visa-free travel to Hong Kong could also face much tougher Chinese visa restrictions. The president said when asked by a journalist that he had no plans to speak to Chinese President Xi Jinping.
Hong Kong would be expected to lose its special lower American tariff rate, throwing some tens of billions of dollars in annual trade between the US and the territory into doubt. He told reporters that "we hold China fully responsible for concealing the virus and unleashing it upon the world".
Analysts say Hong Kong's status as a global financial hub - and its position as China's gateway to key international financial markets - could also be eroded. Mr Trump's own administration is under scrutiny for its response to the coronavirus pandemic - the US has 3.4 million recorded cases, the highest in the world.
The president's policy address digressed into a lengthy political attack on his Democratic presidential challenger, Joe Biden, ranging from trade and immigration to policing and climate change.
"So Joe Biden and President Obama freely allowed China to pillage our factories, plunder our communities and steal our most precious secrets," the president said.
Perception is reality
It wasn't a matter of if, but when.
Scrapping Hong Kong's special status will mean companies based there now will have to evaluate what this means for them.
Hong Kong is a re-exporting hub, which means that goods that go through Hong Kong to the US but have come from somewhere else - like China for instance - have avoided the tariffs the US has slapped on China.
Now that Hong Kong's special status is gone - mainland Chinese companies may look for another place to send their goods - which would see Hong Kong's port and logistics businesses suffer.
And how much of an impact will this have on American and multinational companies using Hong Kong as a regional hub?
Well, as one business consultant told me - the structural reasons for why a company would use Hong Kong as a hub are still there - low tax rates, good geographic location, convertibility of currency.
But perception is reality - and if the perception is that doing business in Hong Kong has become so much more onerous - why not decamp to China or Singapore instead.
Hong Kong's new security lawHong Kong's new security law
What is going on with US-China relations?What is going on with US-China relations?
Washington-Beijing ties have become increasingly frayed in recent months.Washington-Beijing ties have become increasingly frayed in recent months.
With the US presidential election looming in November, both Mr Trump and his Democratic challenger, Joe Biden, have accused each other of being weak on China. With Mr Trump facing an uphill battle for re-election this November, he and his Democratic challenger, Joe Biden, have accused each other of being weak on China.
On Monday, the administration rejected China's military build-up in the South China Sea, accusing it of bullying neighbours.On Monday, the administration rejected China's military build-up in the South China Sea, accusing it of bullying neighbours.
Last Friday, Mr Trump told reporters on Air Force One that a "phase two" trade deal with China was in doubt because of its handling of coronavirus.Last Friday, Mr Trump told reporters on Air Force One that a "phase two" trade deal with China was in doubt because of its handling of coronavirus.
"The relationship with China has been severely damaged," he said. "They could have stopped the plague, they could have stopped it, they didn't stop it.""The relationship with China has been severely damaged," he said. "They could have stopped the plague, they could have stopped it, they didn't stop it."
The US also officially withdrew last week from the World Health Organization, which Mr Trump had accused of being beholden to China.The US also officially withdrew last week from the World Health Organization, which Mr Trump had accused of being beholden to China.
Last week, too, the Trump administration announced sanctions against Chinese politicians who it says are responsible for human rights violations against Muslim minorities in Xinjiang.Last week, too, the Trump administration announced sanctions against Chinese politicians who it says are responsible for human rights violations against Muslim minorities in Xinjiang.