US PRESIDENT DONALD TRUMP has signed the Hong Kong Autonomy Act into law. This affords him sweeping powers to impose financial sanctions on officials, financial institutions and Chinese state entities that his administration deems to be aiding and abetting the new national security law Beijing has imposed on Hong Kong.
He has also signed an executive order that would end preferential trade treatment for the territory. Exports from Hong Kong will now be subject to the same tariffs the United States imposes on goods from the mainland.
The scope of the new sanctions will be far broader than the Magnitsky Act financial sanctions announced on July 9 on four Chinese officials it charges are responsible for human rights violations against the predominantly Muslim ethnic Uighurs in Xinjiang.
They will also make it more difficult for US and European firms to preserve all of their operations in Hong Kong, especially those that require confidentiality and data protection. The Catch-22 is that Hong Kong’s national security law makes it illegal to comply with US sanctions against Hong Kong and China.
Coming the same day as Trump administration officials were celebrating the exclusion of Huawei Technologies from the United Kingdom’s 5G network, the new sanction powers are only likely to hasten the day when companies will have to choose between doing business with the United States or China. The day Hong Kong is just another big city in southern China is even closer to hand.
Update: The Foreign Ministry has condemned both the signing of the Hong Kong Autonomy Act into Law and the removal of Hong Kong’s special trade status as ‘gross interference’ in internal affairs. China promises retaliatory measures for both.