The recent breakthrough in U.S.-China trade talks is beneficial for Hong Kong, trade minister Edward Yau Tang-wah said in an interview last week, but concerns remained as Trump hinted he needs a “much better deal” from China.
China and the U.S. said in a joint statement on May 20 that they reached a consensus to “substantially reduce” the US$375 billion trade deficit the U.S. has with China and that China would “significantly increase” purchases of American goods and services.
The statement came after two days of talks between China’s Vice Premier Liu He and top U.S. economic officials in Washington last week and was hailed as a “huge success” in Chinese media, as the two nations appeared to have made some progress to avert a full-blown trade war. Liu was quoted as saying that both sides had agreed to stop imposing trade tariffs on each other.
Meanwhile, in an interview with the Hong Kong-based Radio Television Hong Kong (RTHK), Yau said China and the U.S. are the SAR’s top two trade partners and that an easing of trade tension reduced uncertainties surrounding Hong Kong’s financial outlook and help maintain a high economic growth.
However, Yau remained concerned over Washington’s decision earlier to impose a 23.6 percent tariff on Hong Kong-made aluminium products, adding that he would follow up with the U.S. to discuss possibilities of removing such tariffs.
“The Hong Kong government disapproves of this proposed action by the U.S. government. We consider this is a unilateral and discriminatory act which is based on unfounded allegations,” Yau said earlier this year.
Yau’s comments followed a February 16 report by the US Department of Commerce that suggested imposing tariffs on aluminium products made in Hong Kong and mainland China and three other countries.
Five major Hong Kong trade bodies, including the Federation of Hong Kong Industries, the Chinese Manufacturers’ Association of Hong Kong, the Hong Kong General Chamber of Commerce, and the Hong Kong Chinese Importers’ and Exporters’ Association, voiced their opposition to the US consul general, calling the tariffs as “unfair and discriminatory trade arrangements towards individual countries or regions”.
“The [associations are] concerned that this may lay down a precedent for the US and to use this in the future as an excuse to introduce similar unfair trade measures on other imports,” they said in a statement urging the Hong Kong government to “contemplate follow-up actions”.
Finance chief Paul Chan Mo-po echoed their comments, and added that Hong Kong might end up seeing one out of five jobs affected if a full-blown trade war between China and the U.S. were to happen.
The dialogue is further complicated by Trump’s comment this week, in which he rejected the suggestion that he was softening his position on “Chinese trade abuses”.
“Our trade deal with China is moving along nicely but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion,” Trump said in a twitter post.
“We’ll see what happens, but that deal I will say could be much different from the deal that finally emerges and it may be a much better deal for the United States,” Trump added.
“[The joint statement is] Not a peace treaty, but a temporary truce,” Larry Hu and Irene Wu, analysts with Macquarie Capital Ltd., said. “It is premature to completely rule out the risks of trade war.”
U.S. Commerce Secretary Wilbur Ross is scheduled to visit China from June 2 and June 4 for another round of trade talks.
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