WASHINGTON — Secretary of State Mike Pompeo announced Wednesday that the State Department no longer considered Hong Kong to have significant autonomy under Chinese rule, a move that indicated that the Trump administration was likely to end some or all of the US government’s special trade and economic relations with the territory in southern China.
Such actions have been discussed for days by foreign policy aides, and they would be among the harshest punishments imposed by the administration over the last three years on China. They could have far-reaching consequences for global commerce and transform the ways that Chinese and foreign companies operate, as well as upend the lives of many residents of the territory, who have already been under enormous pressure from years of the Chinese Communist Party’s political crackdowns.
Hong Kong has been a global financial and commercial hub since late last century. China relies on the bustling metropolis of ports and skyscrapers on the edge of the South China Sea for transactions with other countries. Many Chinese and foreign firms use it as an international or regional base, and members of elite Chinese Communist Party families or executives with ties to them do business and own property there. Many companies also raise capital by listing on the Hong Kong Stock Exchange.
Pompeo’s announcement came the day before Beijing was expected to pass a national security law that would allow Chinese security agencies to limit civil liberties in Hong Kong. Pompeo has said that would be a “death knell” for Hong Kong, which has had liberties under a semiautonomous system of governance that does not exist in mainland China, including freedoms of speech, the press, and assembly, as well as an independent judiciary.
For days, protesters have taken to the streets to voice outrage at the law proposed by Beijing, only to be beaten back by police officers clad in riot gear and firing tear gas. On Wednesday, police arrested more than 300 people, including students in their teens and early 20s, most on suspicion of unauthorized assembly.
If it proceeds with punishments, the Trump administration could impose the same tariffs on exports from Hong Kong that it puts on goods from mainland China, according to officials with knowledge of the discussions. That could happen soon after the Chinese government approves the national security law Thursday. Other trade restrictions that apply to China, including bans or limits on what American companies can sell to Chinese companies because of national security or human rights concerns, may be imposed on Hong Kong as well.
Some of President Trump’s top economic advisers prefer a more conciliatory approach to dealing with the world’s second-largest economy, and they are likely to urge caution as Trump reviews his options. American corporate executives have already said the administration should act with care.
The certification by the State Department is a recommendation on policy direction and does not itself catalyze any actions immediately. American officials, including Trump, will now weigh what steps to take.
The United States is likely to choose specific areas in which to break off cooperation first with Hong Kong, including on trade. The president would probably need to issue an executive order to end the special relationship entirely.
The announcement by Pompeo is certain to draw condemnation from Beijing, where the government is holding its annual legislative session this week. Officials announced details of the proposed security law at the start of the session.