Secretary of State Mike Pompeo told Congress Wednesday that Hong Kong was no longer autonomous from China, a determination that could affect the region’s trade relationship with the United States.
The State Department is required under a pro-democracy law passed late last year, to determine if Hong Kong is autonomous from China. The legislation makes it binding on the president to impose sanctions on foreign agents that interfere with “fundamental freedoms and autonomy in Hong Kong,” reported CNBC.
Pompeo’s statement comes after a law was proposed during China’s National People’s Congress, that would punish acts of sedition against the national government.
The secretary of state concluded, “No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.”
Why It Matters
Hong Kong, as of now, is exempt from the crippling tariffs imposed by the Trump administration on Chinese exports as part of the ongoing trade war between Washington and Beijing, reported CNBC.
If Hong Kong were to lose its special status, the exemptions would no longer be available for the specially administered region of China.
Meanwhile, American business groups in Hong Kong, such as the U.S.-China Business Council, have urged the president to exert caution in revoking the city's special status under U.S. law.
Trade between Hong Kong and the U.S. was worth more than $66 billion in 2018, according to the Office of the U.S. Trade Representative. According to the U.S. consulate in Hong Kong, there are at least 1,200 American firms doing business in the Chinese territory.
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