US President Donald Trump announced Friday that his administration will soon move to strip Hong Kong’s special trade status in response to China’s plans to impose a national security law in the city.
“China has replaced its promised formula of one country, two systems, with one country, one system,” Trump said, addressing reporters in the White House Rose Garden.
“Therefore, I am directing my administration to begin the process of eliminating policy exemptions that give Hong Kong different and special treatment,” he continued.
The announcement comes after Secretary of State Mike Pompeo said earlier this week that Hong Kong is “no longer autonomous from mainland China” and does not continue to merit special treatment under US law.
The Hong Kong Human Rights and Democracy Act, which passed last November, requires the US State Department to annually access if Hong Kong’s level of autonomy is sufficient enough to justify trade privileges.
Since 1992, Hong Kong has enjoyed a trade relationship with the US that allows it to be treated as a separate customs territory to mainland China. This means that Hong Kong is not subject to the same export controls and tariffs that China is when it conducts business with the US.
The city’s trade status has allowed Hong Kong to flourish over the years into a global trade hub and an attractive investment destination. A removal of the status could have far-reaching implications for firms and put billions of dollars worth of trade between Hong Kong and the US at risk.
Trump also said that the US would be imposing sanctions on Chinese and Hong Kong officials “directly or indirectly involved in eroding Hong Kong’s autonomy.”
“This is a tragedy for the people of Hong Kong, the people of China, and indeed the people of the world,” he added.