Mark Pinkstone/Former Chief Information Officer of HK government
Academics proclaim that in tariff wars there are no winners, all economies fell. True, but the current “war” is not about economics, as it started out to be, but a personal vendetta by US president Trump against China’s president Xi Jinping.
Trump started the war by imposing trade tariffs against all of its trading partners. There were no exceptions, even for those, like Hong Kong and Australia, who had deficits with the US.
Even though Hong Kong is a member of the World Trade Organisation (WTO) in its own right, Trump lumped Hong Kong under the broader China umbrella and imposed tariff hikes totalling 145 per cent against all products exported to the US. The rest of the world faced a base-line levy of 10 per cent. And this is where Trump’s plan became personal.
Trump’s plan was for the world to kowtow to him and acknowledge that he was the world’s leader. Most did, although there has not been any announcement of any deal being struck anywhere. And then came China’s Xi Jinping, who refused to kowtow, vowing to “fight to the end” and upped the ante of tariffs on US goods imported into the mainland.
Economies were floundering and markets were weak. Trump took advantage of the low market and after announcing exemptions for his billionaire club, while the rest of the population suffered, it appeared that he had made a deliberate gesture to manipulate the stock markets by declaring a 90-day pause in the tariffs. “Be cool” Trump wrote just hours before announcing the pause. “This is a great time to buy!” This was white collar terrorism in plain sight.
Global markets rose rapidly with the Hong Kong Stock Exchange up 51.17 per cent. But that bottomed out the following day amid rumors Trump was to declare martial law to police the southern border with Mexico.
The manoeuvre could have been taken from his book “How to make a deal”. Except it is not his book as he often boasts. The book was written by ghost writer Tony Schwartz who wrote in The New Yorker “Trump’s tweet that he has written bestselling books is one more deceit and delusion. He is incapable of reading a book, much less writing one.”
While Trump sits in the Oval Office contemplating how he can outsmart Xi, the Chinese president has been busy shoring up free trade deals in Vietnam, Malaysia and Cambodia. In all three South East Asian countries he was warmly greeted as a dear friend. Of the three, Vietnam is the hardest hit with a 43 per cent tax on its exports to the US.
Trump’s racist slurs against all things Chinese were compounded during the trade war when he threatened to delist Hong Kong and mainland stocks from all US exchanges – the New York Stock Exchange, Nasdaq and NYSE American. It is estimated there are 286 mainland and Hong Kong stocks with a market capitalization of US$1.1 trillion listed in the US.
And again, Trump has miscalculated his “punishment.” All companies delisted in the US will simply come to Hong Kong as their secondary and dual primary listing to raise funds and boost our Initial Public Offering (IPO) market.
Hong Kong’s financial secretary, Paul Chan Mo Po, is bullish about the outcome of the war, with Hong Kong becoming stronger as a leading fundraising hub and with enhanced trade ties with the Asia-Pacific and Middle East regions.
But Trump is not stopping there and he’s trying every possible means to curtail China’s position on the world stage. After taking over control of the Panama Canal to tax mainland and Hong Kong ships passing through the waterway, he now plans to tax every ship made in China, regardless of its registration, when they visit US ports.
The actions by Trump have done more harm to himself than to the countries he targeted. In the eyes of world leaders, he cannot be trusted and trading with him in the future will be for essentials only. The harm he has done to his country will take years to repair, and those who voted for him will surely be more prudent when the next elections come about. He has failed miserably with his campaign policy to “Make America Great Again.” He has done exactly the opposite.
Mark Pinkstone
** The blog article is the sole responsibility of the author and does not represent the position of our company. **
Hong Kong is facing a dilemma as more locals are spending their dollars outside of the city than what the visitors are bringing in.
Relaxed visa/permit restrictions for locals and foreign residents alike is making it easier for travel to the mainland while inbound traffic crossing the boundary is low budget and spending less on accommodation and food.
Tourism is an important pillar for Hong Kong’s economy. In pre-COVID times, tourism accounted for about four per cent of the territory’s Gross Domestic Product (GDP) and provided for about six per cent of total employment.
In Hong Kong’s heydays, the city saw about 65 million tourists in 2018, of which 51 million came from the mainland. It was boom time for retailers and restaurants. Long queues of mainland shoppers would line the streets along Canton Road and elsewhere waiting to buy luxury items from Gucci, Prada, Tiffany’s and other high-end stores which set up shop in Hong Kong to tap this lucrative market.
Today many restaurants and retail outlets are closing down, especially in the boundary towns of Sheung Shui and Yuen Long. The market is no longer there, and high rental costs make it almost impossible to survive.
During the 2025/2026 festive season, Hong Kong saw a 25.6 per cent rise in inbound trips on New Year’s Day 2026 (664,338 trips), but this was still countered by a massive 515,954 outbound exits on the same day.
Winston Yeung, chair of the Hong Kong Federation of Restaurants & Related Trades, told local media that business was sluggish during the Christmas holiday, with some restaurant owners calling it “the slowest business at Christmas over the past 10 years.”
Unfortunately, the local market is not propping up the tourism outlets. Instead, the locals are traveling in large numbers to Shenzhen and Macau and other parts of China for day trips or extended holidays, thereby providing a leakage in the local economy.
While Hong Kong received more than an estimated 45 million visitors last year, more than about 100 million departures were recorded by the Immigration Department of locals leaving Hong Kong by plane, train or bus mainly to the mainland (75 per cent), and to other major Asian destinations.
Hong Kong has 320 hotels offering 92,907 rooms, according to the Hong Kong Tourism Board. Despite mainlanders’ choice of more budget accommodation, occupancy rates for the hotel industry remained high at 88 per cent last year. The major hotels are not affected by the change in mainlanders’ preferences as they rely more on the affluent international tourist, visiting Hong Kong for business, conventions or holidays.
Property developer, Caldwell Banker Richard Ellis (CBRE) says Hong Kong’s hospitality market currently presents various investment-ready assets including rare investment opportunities for upper upscale and luxury hotels. These high-end properties are particularly attractive due to their resilience, as they are less reliant on Chinese group travelers and enjoy sustained spending power among affluent individual travelers and international visitors. This makes them attractive for investors seeking stable returns in a dynamic market.
To encourage locals to spend more at home and at the same time provide a bonus for tourists, Hong Kong has organised a series of mega events, many held in the new sports stadium on the site of the old Kai Tak airport in Kowloon. Traditional events in 2026 will include the French May Arts festival in March, Hong Kong Book Fair in July, Hong Kong performing Arts Expo in October, the World Snooker Grand Prix in February, and, of course, the international dragon boat races in June.
Blockbusters will include BlackPink World tour in January, the Hong Kong marathon, which draws in runners and their supports from around the world, and the Hong Kong Tennis Open also in January.
That is good for the inbound and outbound tourists alike. But more needs to be done to tip the tourism scales to a surplus for Hong Kong’s economy to grow at a faster pace. As the saying goes charity starts at home, so it is up to us as local residents who have reaped the benefits of the city to spend more in local restaurants and retail outlets than spend it elsewhere. Support local enterprises. After all, the restaurants in Hong Kong are ranked among the best in the world and are tax free as against a value-added tax applied to restaurants and shops in the mainland.
