Trump penalises Hong Kong even though US has trade surplus

Mark Pinkstone/Former Chief Information Officer of HK government

US President Donald Trump has started an international biased war on trade; biased in a way that places like Hong Kong are being penalised even though they have a deficit trade balance with the US.

The US goods trade surplus with Hong Kong was US$21.9 billion in 2024, a 7.6 per cent increase over 2023.

Yet, Hong Kong has long been considered a separate customs territory from the mainland of China as stipulated in the Basic Law and by the World Trade Organisation (WTO) before and after the Handover in 1997. It also enjoyed preferential treatment from the US in terms of trade and economy under US law since 1992. But Trump put an end to that with an executive order in his first term of office in 2019 when he sided with the rioters in Hong Kong.

Total goods traded between the US and Hong Kong last year totalled US$33.8 billion. US exports to Hong Kong were US$27.9 billion while Hong Kong exports to the US totalled only $6 billion, thus the near US$22 billion surplus in favour of the US.

By wrongfully lumping Hong Kong’s trade figures with that of the mainland, Hong Kong is being penalised by the US for something it hasn’t done.

Trade lecturer at City University of Hong Kong, Julien Chaisse, has been quoted in the local press as saying “Hong Kong is in a tough spot. The US no longer treats Hong Kong as a separate from the mainland, which strips away any trade advantages we once had.”

Hong Kong has, naturally, lodged a complaint against the US with the WTO. A spokesman for the Special Administration Region (SAR) Government of Hong Kong, said “The US measures are grossly inconsistent of the relevant WTO rules and ignore our status as a separate customs territory as stipulated in Article 116 of the Basic Law and recognized by the WTO.”

The HKSAR Government will formally launch procedures in accordance with the WTO Dispute Settlement Mechanism against the US’ unreasonable measures to defend our legitimate rights.

However, although the WTO is an independent body it is currently being controlled by the US.

Traditionally the Appellate Court of the WTO adjudicates disputes between member states, but it is currently composed of only one judge. In normal circumstances, the court has seven judges, but a minimum of three is required for a quorum. The appellate body fell to one judge on December 10 last year when member states failed to make new appointments. That in turn has halted all appeal judgements on trade matters until a new solution is reached. Also, the US has  threatened to block the  body’s budget.  So, even though both China and Hong Kong, plus many other member states, have lodged complaints against the US for its tariffs war, very little can be done until more judges are appointed. And that could take ages as such appointments will continue to be blocked by the US.

It is well recognized that there are no winners in trade wars, and it is the little man, the man in the street who suffers as the tariffs are passed down the line to the consumer, thus causing inflation to rise. But Trump thinks nought for the little man, only himself.

The Chinese ambassador to the US, Xie Feng, also believes there are no winners in trade wars nor in wars over science, technology or industry. Differences, he said between the two nations should be the driving force for exchanges and mutual learning rather than “the excuse for rejection and confrontation and that successes of each were opportunities for the other.”

On the sidelines of last week’s National Peoples’ Congress in Beijing, China’s commerce minister Wang Wentao, hit back at Trump saying that coercion and threats would not work on China, nor would they scare China. “China’s determination to defend its own interests is unswerving. There are no winners in a trade war.

“If the American side goes further down this wrong path, we will fight to the end,” he warned.

China is the main trading partner in 140 countries and has free trade agreements (FTAs) with 30. And it is ready to sign even more FTAs to minimize the impact of restrictions imposed by the US.

So, China as perhaps the world’s largest trading partner and a key cog in the supply chain mechanism, the US bullying tactics would have little impact on China’s Gross Domestic Product by as little as 1 per cent, even if the tariffs went as high as 60 per cent.

Mark Pinkstone

** The blog article is the sole responsibility of the author and does not represent the position of our company. **

So, US President Donald Trump is going to ask China to release former media tycoon Jimmy Lai Chee-ying, currently facing sedition and collusion charges in Hong Kong, during the trade negotiation talks in Switzerland this weekend, according to international news agency, Reuters.

There is little chance of that ever happening. In the whole scheme of world conflicts and international trade negotiations, the trial of a Hong Kong man on sedition charges pales into insignificance. Just a leaf in a tea cup. And even if it did come up during the hard talk negotiations, the Chinese side will simply ignore it.

British-based Reuters boasts a readership of more than one billion people a day and is used by some 750 television broadcasters covering 115 countries. Yes, it does have reach and is influential. But it is also biased, like most of the western media towards China and Hong Kong.

Indeed, the Reuters release was picked up by most of the world’s media.  Bloomberg quoted Trump from the release’s account of a radio interview: “I think talking about Jimmy Lai is a very good idea. We’ll put it down and we’ll put it as part of the negotiations.”

Trump was responding to a question put by Republican political commentator Hugh Hewitt on his Hughniverse podcast on May 7.

During the negotiations on Hong Kong’s future in the 1980s, Reuters moved its regional headquarters from Hong Kong to Singapore as it had no faith in Hong Kong’s future. It still doesn’t, even though Hong Kong has fought off adversaries and doomsday prophets with a shield of truth and perseverance. The story of Hong Kong’s triumphs and successes have been retold many times.

Reuters reports: “The trial of Lai – a long-standing critic of the Chinese Communist Party – has shone a spotlight on a sweeping crackdown on dissent in Hong Kong following China’s imposition of a national security law in Hong Kong in 2020.”

The writers, both Hong Kong residents, were in Hong Kong and witnessed the bloody riots that prevailed at the time, but chose to side with the dissidents and their reportage thereafter has been colored by their own emotions. Gone are the days of balanced, unbiased reporting, especially with such a reputable news organization.

But the story is continually fuelled by Lai’s son, Sebastien and his public relations team of barristers at Doughty Street Chambers in London.

On World Press Freedom Day last week, Fox News devoted a segment to Sebastien who noted that in 1995 Lai senior founded Apple Daily…which quickly “became a beacon for free speech.”  Every Hong Konger knows that Apple Daily was launched on a platform of sex, gossip and more sex. It was a sleaze newspaper, known in the west as the “yellow press.”  In its early days it had no political bias. It was not until he ran foul with the Beijing authorities over regulations concerning his Giordano store that his attitude changed towards Beijing and anything relating to authority.

Sebastien summed up his father as “an immigrant who never quite fit in.”

In this final plea, Sebastien sought the release of his father, even before a verdict has been reached in his trial, so that he “can leave Hong Kong and be with his family.”

Lai faces three charges: two counts of collusion with a foreign country or with external elements to endanger national security and one count of conspiracy to publish a seditious publication.

Jimmy Lai wrapped up his testimony on March 6 after taking the witness stand for 52 days. The trial is set to hear closing arguments on August 14, which are expected to last eight days.

But again, the western press smeared the judiciary before the trial even began. The infamous BBC lauded: “Mr Lai cannot expect a fair trial in today’s Hong Kong…”

It quoted Doughty Street barrister Jonathan Price, a member of Lai’s so-called international legal team saying that the fundamental principle of the rule of law in Hong Kong has eroded and that “everybody knows there’s only going to be one result.”

Mr Price, his colleagues in Doughty Street Chambers and the BBC should be reminded that Hong Kong’s judiciary ranks No.23 out of the 142 jurisdictions in the authoritative World Justice Project last year and even higher ratings in World Economic Forum earlier findings.