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For TARIFFS, what could this mean for the trade war?
Background: HK is a separate customs territory from China
• HK applies its own MFN tariffs (0.0%) to imports from US
• US applies same MFN tariffs (3.4% on avg) to HK as US applies to all WTO members https://www.wsj.com/articles/u-s-officially-declares-that-hong-kong-is-no-longer-autonomous-11590596133
Background: HK is a separate customs territory from China
• HK applies its own MFN tariffs (0.0%) to imports from US
• US applies same MFN tariffs (3.4% on avg) to HK as US applies to all WTO members https://www.wsj.com/articles/u-s-officially-declares-that-hong-kong-is-no-longer-autonomous-11590596133
Suppose Hong Kong and China were to suddenly become "one" in context of Trump-China trade war,
(A) Suppose US suddenly extends its Section 301 tariffs on China to Hong Kong as well
This would not hit much more trade. US total goods imports from HK were only $5 billion in 2019.
(A) Suppose US suddenly extends its Section 301 tariffs on China to Hong Kong as well
This would not hit much more trade. US total goods imports from HK were only $5 billion in 2019.
Suppose Hong Kong and China suddenly become "one" in context of Trump-China trade war,
(B) Suppose China suddenly takes over HK's tariffs and forces them to align with Beijing's retaliatory tariffs.
This could hit more trade. US total goods exports to HK were $31 bn in 2019.
(B) Suppose China suddenly takes over HK's tariffs and forces them to align with Beijing's retaliatory tariffs.
This could hit more trade. US total goods exports to HK were $31 bn in 2019.
There are a number of steps needed before (A) and (B) happen. And one would need to map products over which tariffs remain on today (despite the phase one deal) with trade flows to compute exact amounts of trade affected,
But this gives a sense of magnitudes & asymmetry.
But this gives a sense of magnitudes & asymmetry.
