Trump ends preferential treatment toHong Kong, gems and jewellery are now subject to the same duties as China

US President Donald Trump has signed an order to end preferential economic treatment for Hong Kong, after China enacted a new security law there.

Hong Kong would be treated “the same as mainland China”, Mr Trump said. He also signed a law to impose sanctions on officials who cracked down on rights.

China has strongly criticised the move, vowing to take retaliatory action.

The US sees the security law as a threat to the freedoms Hong Kong has enjoyed under a 1984 agreement.

That special status was agreed between China and Hong Kong’s former colonial power, the UK, before sovereignty was returned to Beijing in 1997.

The new security law – which outlaws criticism of China’s government – is the most sweeping change to the political landscape of Hong Kong since then.

That means goods from Hong Kong will now be considered as being from China for duty purposes, Hillman and other Washington trade lawyers said.

As Hong Kong shifted from being a manufacturing center to a trading and finance hub, its goods exports to the United States have fallen, to only $4.7 billion in 2019. The largest category, according to U.S. Census Bureau data here was $2.2 billion worth of returned goods initially exported from the United States.

The next largest categories were gem diamonds at $388 million, jewellery at $317 million and other gemstones at $247 million.

The Trump order means that gems and jewellery from Hong Kong – among the biggest imports from the territory – along with some other products, are now subject to the same duties.

Courtesy: Reuters/BBC