US firms in Hong Kong awake to 'sad day' as Trump vows to curb economic ties

US firms in Hong Kong awake to 'sad day' as Trump vows to curb economic ties

Hong Kong skyline economy buildings
Residential and commercial buildings in the Kowloon district (foreground) with the skyline of Hong Kong Island past Victoria Harbour in the distance. (Photo: AFP/Anthony Wallace)

HONG KONG: The American Chamber of Commerce in Hong Kong said on Saturday (May 30) it was "a sad day" for the global financial centre, hours after US President Donald Trump moved toward stripping the city of its special treatment in a bid to punish China.

In some of his toughest rhetoric yet, Trump said Beijing had broken its word over Hong Kong's high degree of autonomy by proposing new national security legislation and the territory no longer warranted US economic privileges.

"We will take action to revoke Hong Kong's preferential treatment as a separate customs and travel territory from the rest of China," Trump said, adding that Washington would also impose sanctions on individuals seen as responsible for "smothering - absolutely smothering - Hong Kong's freedom".

Trump told reporters at the White House that China's move on Hong Kong was a tragedy for the world, but he gave no timetable for the moves, leaving Hong Kong residents, businesses and officials to ponder just how far his administration will go.

"This is an emotional moment for Americans in Hong Kong and it will take companies and families a while to digest the ramifications," AmCham president Tara Joseph said in a statement.

"Many of us ... have deep ties to this city and with Hong Kong people. We love Hong Kong and it's a sad day," she said, adding the chamber would continue to work with its members to maintain Hong Kong's status as a vital business centre.

READ: US, UK raise Hong Kong at UN as pressure mounts on China 

China's parliament this week approved a decision to create laws for Hong Kong to curb sedition, secession, terrorism and foreign interference. Mainland security and intelligence agents may be stationed in the city for the first time - moves critics say put the city's extensive freedoms at risk.

Authorities in Beijing and Hong Kong insist the legislation will target only a small number of "troublemakers" who threaten China’s national security. They say such action is urgently needed after months of sometimes violent anti-government protests rocked the city last year.

Protests movements are simmering again as Hong Kong emerges from its coronavirus shutdown. Demonstrators are expected to take to the streets on Sunday.

FILE PHOTO: Anti-government demonstrators scuffle with riot police during a lunch time protest as a
Anti-government demonstrators scuffle with riot police during a protest as a second reading of a controversial national anthem law takes place in Hong Kong on May 27, 2020. (Photo: Reuters/Tyrone Siu/File Photo)

Trump did not name any sanctions targets but said the announcement would "affect the full range of agreements we have with Hong Kong", including the US-Hong Kong extradition treaty to export controls on dual-use technologies and more "with few exceptions".

China's Global Times, published by the People's Daily, the official newspaper of China's ruling Communist Party, said Trump's decision was a "recklessly arbitrary" step.

READ: US revocation of Hong Kong's special status 'barbaric': China's HK office

The Hong Kong government - which has a long history of working ties with US counterparts, distinct from Beijing - has yet to respond, although it warned on Thursday the move could be a double-edged sword.

READ: Hong Kong government warns removing US special status is 'double-edged sword'

More than 1,300 US firms have offices in Hong Kong and provide about 100,000 jobs. In the past decade, the US trade surplus with Hong Kong has been the biggest among all its trading partners, totalling US$297 billion from 2009 to 2018.

Washington has also worked quietly with Hong Kong on anti-terrorist and money-laundering efforts, and U.S. envoys have long valued Hong Kong's separate membership in some large international economic organisations.

"Hong Kong is an articulate champion of free markets and effective champion of free markets and the reduction of trade barriers," according to a fact sheet on the US Consulate's website.

Britain, meanwhile, is prepared to offer extended visa rights and a pathway to citizenship for almost 3 million Hong Kong residents in response to China's push to impose national security legislation in the former British colony.

Source: Reuters/ac