Dear Valued Customers,
On Friday May 29, Trump held a presser to announce actions he will take against China, Hong Kong and the World Health Organization (W.H.O.) for the following reasons:
- Ongoing Chinese theft of U.S. industrial and technological secret
- China unlawfully claimed territory in the Pacific Ocean, threatening freedom of navigation
- China broke its obligations to maintain autonomy of Hong Kong in violation of the 1984 treaty with England with 27 years remaining, by unilaterally imposing control over Hong Kong’s security, changing the “one country/two systems” to “one country/one system”
- China ignored its reporting obligations to the W.H.O. and covered-up the facts when the Wuhan virus was first discovered
- China pressured the W.H.O. to mislead the world about transmissibility of the virus causing a global pandemic resulting in the loss of lives of over 100,000 in the U.S. and over 1 million globally and global economic harm
- The W.H.O. refused to make reforms requested by the USA
Based on the foregoing, Trump announced the following actions he intends to take:
- Terminate the relationship with the W.H.O. and will redirect funds to other global health organizations
- Rebuild America’s economic independence
- Restore critical supply chains
- Protect America’s scientific and technological advances from being stolen by China
- Issue a proclamation today to secure vital research by American universities and suspend entry by certain foreign nationals from China who are identified as potential security risks
- Take action to protect the integrity of America’s financial systems by:
- directing a Presidential Working Group to study differing practices on Chinese companies listed on US financial markets
- protecting American investors from hidden and undue risks by Chinese companies that do not play by the same rules
- Since Hong Kong is no longer sufficiently autonomous, the Trump Administration will begin the process of eliminating policy exemptions and special treatment afforded to Hong Kong as follows:
- The full range of treaty agreements with Hong Kong are affected
- Export controls of dual-use technology applicable to China will be enforced against U.S. exports to Hong Kong
- Revise State Department travel advisories to Hong Kong to reflect an increased danger of surveillance and punishment by the Chinese state security apparatus
- Revoke Hong Kong’s preferential treatment as a separate customs and travel territory from China
- Steps will be taken to sanction certain Chinese officials who are directly or indirectly involved in eroding Hong Kong’s autonomy
Trump did not provide specific dates as to when these actions will take place.
The main take away for international traders appears to be the treatment of Hong Kong as a part of China, making all Hong Kong imports and exports subject to the same rules applicable to China. We believe this would mean that the country of export would become CN (China) instead of HK (Hong Kong), thereby making imports from Hong Kong subject to Section 301 duties and other restrictions such as antidumping and countervailing duties applicable to Chinese exports, etc.
If you currently trade with Hong Kong, you may wish to review your import/export transactions to determine how your transactions will be affected by the changes before they go into effect.
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