United States President Donald Trump announced on Thursday that he had authorized the Department of Commerce to significantly raise tariffs on steel and aluminum imports from several foreign sources. The decision followed an investigation by the department released on Feb 16 that concluded “unfair” quantities of steel and aluminum imported from abroad hurt the US economy and even put national security at risk. The sources of those “unfair” exports include the Hong Kong Special Administrative Region, Chinese mainland, Russia, Venezuela and Vietnam.
This is the first time Hong Kong has ever been “blacklisted” by the US government over exports. The HKSAR Government and five leading business bodies of the city immediately expressed strong opposition to the US decision.
The SAR government cited trade figures to refute US government claims to justify its protectionist maneuver, pointing out the US enjoys a more than US$27 billion favorable balance of trade with Hong Kong every year; the small unfavorable balance of trade in aluminum imports from Hong Kong is only about US$55 million a year on average. In the first 10 months of last year the US imported just about US$30 million worth of aluminum products from Hong Kong, accounting for less than 0.2 percent of the total aluminum import value. It is simply preposterous to say this can hurt the US economy and even put its national security at risk.
Hong Kong has long been known around the world as a free port for international trade and has been spared fallout from trade wars until now. This time the city has become a victim of “collateral damage”, presumably caught in the crossfire of a US-Chinese mainland trade spat for the very first time. However, amid the unprecedented, profound and all-round readjustment of the global politico-economic situation, one should understand the US trade protectionism offensive against China would include the HKSAR sooner or later because it is a part of the People’s Republic of China.
The SAR government is watching with great concern what further protectionist measures based on unfounded claims the US government may announce, adversely affecting Hong Kong’s exports, in the days to come but will wait and see how Washington responds to its opposition before deciding what it can do to remedy the situation.
Even if the US government responds positively to the HKSAR Government and business bodies, however, there is no way Hong Kong can avoid the rising tide of trade protectionism triggered by this global politico-economic adjustment. The city must prepare itself, in tactics as well as strategy, for any turn of events from here on.
For starters, all members of Hong Kong society regardless of their backgrounds must arrive at a correct common understanding of the ongoing readjustment of the global economic, financial and political situation.
Hong Kong is a cosmopolitan city of world renown, an important center of international finance and trade, a transport hub with about 10 percent of its population being non-Chinese. Many residents of Chinese descent hold foreign passports. That is a pretty good reason to believe most adult Hong Kong residents share a common understanding and attach a fair amount of importance to the unprecedented, all-round and profound readjustment of the global economic, financial and political situation. Alas the reality is so ironically to the contrary, as Hong Kong society has shown time and again that it has yet to reach such a common understanding. After the US government readjusted its own global strategies late last year and early this year and named China and Russia as its main rivals, all the press around the world went gaga about it except local media in Hong Kong, where little analytical light has been shed on how the SAR is linked to and affected by the changing global situation.
Hong Kong society also needs to realize sooner rather than later that both the SAR and mainland are pursuing the same shared future for mankind.
Hong Kong was under British rule for more than one and a half centuries before China resumed the exercise of sovereignty two decades ago. The period in history when Hong Kong was separated from the motherland led some local residents to say they are “from Hong Kong” instead of Chinese. Given the openness of the Hong Kong economy, many locals and especially those in the “establishment” were convinced the city can navigate between the US-led Western bloc and China without being caught up in their disputes.
Sometime after the opposition camp held the July 1 mass rally in 2003, a few pro-opposition members of the intelligentsia put forward the idea of “a shared future for Hong Kong”, claiming Hong Kong can serve as an intermediary between China and Western powers over economic matters. As the profound and all-round readjustment of the global economic, financial and political situation continues, however, the US has shattered this dream by declaring China one of its main rivals. Hong Kong, as an inseparable part of China, can no longer assume the role of an unaffected intermediary between the West and China.
Last but not the least, the SAR government and Hong Kong society need to adopt forward-thinking measures to protect the city’s own interests against growing trade protectionism by Western developed economies, particularly the US.
(The author is a senior research fellow of China Everbright Holdings)
(Published on Page 8, China Daily Hong Kong Edition, March 5, 2018)