WASHINGTON (Reuters) – President Donald Trump on Tuesday ordered the end of Hong Kong’s special status under US law to punish China for what he called “oppressive actions” against the former British colony, prompting Beijing to warn of retaliation.
Citing China’s decision to enact a new national security law for Hong Kong, Trump signed an executive order that he said would end preferential economic treatment for the city.
“Without special privileges, without special economic treatment and without the export of sensitive technologies,” he said at a press conference.
Acting on Tuesday’s deadline, it also signed a bill passed by the United States Congress to penalize banks doing business with Chinese officials who implement the new security law.
“Today I signed legislation and an executive order to hold China accountable for its aggressive actions against the people of Hong Kong,” said Trump.
“Hong Kong will now be treated in the same way as mainland China,” he added.
According to the executive order, US property would be blocked for anyone who considers himself responsible or complicit in “actions or policies that undermine democratic processes or institutions in Hong Kong,” according to the text of the document published by the White House.
It also orders officials to “revoke license exceptions for exports to Hong Kong” and includes revocation of special treatment for Hong Kong passport holders.
China’s foreign ministry said on Wednesday that Beijing would impose retaliatory sanctions on U.S. individuals and entities in response to the law targeting banks, although the statement issued through state media made no reference to the executive order.
“Hong Kong’s affairs are purely China’s internal affairs and no foreign country has the right to interfere,” the ministry said.
Critics of the security law fear it will crush the broad freedoms promised to Hong Kong when it returned to Chinese rule in 1997, while supporters say it will bring stability to the city after a year of sometimes violent anti-government protests.
The security law punishes what Beijing defines broadly as subversion, secession, terrorism, and collusion with foreign forces with up to life in prison.
The United States’ relations with China have already been affected by the global coronavirus pandemic, China’s military build-up in the South China Sea, its treatment of Uighur Muslims, and massive trade surpluses.
Trump’s handling of the coronavirus pandemic has raised questions about whether he can win re-election on November 3 amid a surge of new infections. He tried to shift the blame onto China.
“Don’t make mistakes. We hold China fully responsible for hiding the virus and unleashing it in the world. They could have stopped it, they should have stopped it. It would have been very easy to do it at the source, when it happened,” he said.
When asked if he planned to speak to Chinese President Xi Jinping, Trump said, “I have no plans to speak to him.”
DOUBLE EDGE SWORD?
Analysts say ending the Hong Kong special treatment entirely could backfire for the United States.
Hong Kong was the source of the United States’ largest bilateral goods trade surplus last year, at $ 26.1 billion, data from the United States Census Bureau show.
According to the State Department, 85,000 U.S. citizens lived in Hong Kong in 2018, and more than 1,300 U.S. companies operate there, including almost all of the major U.S. financial firms.
The territory is an important destination for the legal and accounting services of the United States.
The United States began eliminating Hong Kong’s special status under US law in late June, halting defense exports and restricting territory access to high-tech products as China prepared to enact security legislation.
In May, Trump responded to China’s plans for the security law by saying he was initiating a process to remove the special economic treatment that has allowed Hong Kong to remain a global financial center.
He stopped before calling for an immediate end to the privileges, but said the measures would affect the entire range of the United States’ agreements with Hong Kong, from an extradition treaty to export controls on dual-use technologies.
An American official, who spoke on condition of anonymity, said the administration was also preparing sanctions against Chinese officials and entities involved in the Hong Kong crackdown, including more U.S. travel bans and possible Treasury sanctions.
The timing was unclear. The White House had previously threatened such sanctions, but has so far only imposed visa restrictions on an unspecified number of unidentified Chinese officials.
Reports by Jeff Mason and Steve Holland; Additional reports by David Brunnstrom, Alexandra Alper, Patricia Zengerle, Eric Beech, Makini Brice and Matt Spetalnick; Leslie Adler and Peter Cooney edition
.
