President Trump has indicated he intends to strip Hong Kong, one of the world’s most important financial centers, of special trade privileges after the Chinese Communist Party’s (CCP) new law to prohibit subversion and acts that endanger national security. This comes after several months of pro-democracy protests by Hong Kongers last year when the CCP said action is needed to eliminate “terrorism” and “separatism.”

On Friday, May 29, the president instructed officials “to begin the process of eliminating policy that gives Hong Kong different and special treatment.”

“This will affect the full range of agreements, from our extradition treaty to our export controls on dual-use technologies and more, with few exceptions,” he added.

“We will be revising the State Department travel advisory for Hong Kong to reflect the increase danger of surveillance and punishment by the Chinese state security apparatus,” he said. “We will take action to revoke Hong Kong as a separate customs and travel territory from the rest of China.” Officials from China and Hong Kong “directly or indirectly involved in eroding Hong Kong’s autonomy” would face sanctions, added the president.

The special status of Hong Kong

When Britain returned Hong Kong to the CCP in 1997, a deal was cemented of “one country, two systems” giving Hong Kong autonomy and certain freedoms, including free speech, an independent judicial system, and a free-market economy for 50 years.

Hong Kong no longer has a high degree of autonomy after the CCP’s decision to impose a new security law.

The United States will  revoke special trade dispensations to Hong Kong, as it is no longer separate from the mainland and needs to be treated as such, although the details are not yet clear.

Larry Kudlow, the president’s top economic adviser said Beijing will be “held accountable” for imposing the new law.

“Hong Kong has had a special trading relationship with different types of tariffs and regulations that have allowed it to trade in a freer way, particularly in relation to capital markets,” said Dr. Rebecca Harding, independent trade expert and CEO of Coriolis Technologies. “The US has treated it as an ally, if you like. But it’s now saying we are going to treat you in a similar way to how we treat China,” she said, reported BBC.

Hong Kong and the United States have maintained special trade relations, with a free port allowing no tariffs on imported and exported goods. CCP bullying tactics over Hong Kong are set to erode the status of Hong Kong as a leader in trade on the world stage and the gateway to China.