Hong Kong, historically recognized as a free and open trading hub, is preparing to file a complaint with the World Trade Organization (WTO) against the United States over newly imposed tariffs. The dispute traces back to 2020 when China enforced a national security law on Hong Kong, leading to widespread criticism from the U.S. In retaliation, the U.S. revoked Hong Kong's special status under American law and introduced a 10% tariff on goods from the region.
Eric Chan, Hong Kong's second-highest-ranking official, has openly criticized the U.S. decision, emphasizing its impact on Hong Kong's economy. He stated that the U.S. has ignored Hong Kong's position as a separate customs territory, causing significant disruption for retailers and express shipping companies. The situation further deteriorated with the closure of the "de minimis" duty exemption for packages valued at under $800, which aimed to curb the influx of fentanyl and precursor chemicals into the United States.
"This is absolutely inconsistent with the WTO rules. Of course, they have totally disregarded Hong Kong is a separate customs territory," – Chan
The recent U.S. policy changes have forced goods made in Hong Kong for export to be labeled as originating from China, effectively stripping away one of Hong Kong's key competitive advantages. This decision has not only affected trade dynamics but also introduced chaos among businesses reliant on the region's trade status.
Additionally, the U.S. Postal Service initially suspended all inbound mail and packages from China and Hong Kong, further exacerbating the situation. However, this suspension was later reversed, providing some relief to affected parties.
Hong Kong authorities have deemed the U.S. actions as inconsistent with WTO regulations and plan to formally challenge these measures. Chan expressed his concerns over the unpredictable nature of U.S. policies, which have left businesses in a state of uncertainty.
"All I can say is the policies are mercurial," – Chan
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