Hong Kong’s government announced plans to file a formal complaint with the World Trade Organization (WTO) over recent tariffs imposed by the United States. Chief Secretary Eric Chan condemned the U.S. decision, arguing that it disregards Hong Kong’s status as a separate customs territory, violating WTO rules.
“This is absolutely inconsistent with the WTO rules. The U.S. has completely ignored Hong Kong’s distinct status as a separate customs territory,” Chan stated to reporters on Tuesday, vowing that the city would pursue legal action. While he did not provide specifics, Chan confirmed that Hong Kong would officially challenge the U.S. tariffs at the WTO.
Tariff Dispute and U.S. Actions
The U.S. decision to impose a 10% tariff on goods from Hong Kong is part of a broader trade policy aimed at Chinese imports under former U.S. President Donald Trump. This move is seen as part of the ongoing U.S.-China trade tensions, which have intensified since China implemented a national security law in Hong Kong in 2020. This law prompted the U.S. to strip Hong Kong of its special trading status.
In addition to the tariffs, the U.S. Postal Service recently suspended all inbound mail and packages from Hong Kong and China, only to reverse the decision shortly after. The suspension caused confusion among retailers and shipping firms, leading Chan to describe the policy shifts as “mercurial.”
Impact on Hong Kong’s Trade Hub Status
The U.S. measures also included a change to the “de minimis” duty exemption, eliminating the tariff-free status for goods valued under $800. The U.S. government cited the need to curtail the flow of fentanyl and precursor chemicals into the country as the rationale behind this policy.
Hong Kong, long recognized as a free and open trading hub, has faced mounting challenges since the imposition of the national security law, which led to the erosion of some of its competitive advantages. The U.S. now mandates that goods made in Hong Kong for export to the U.S. must be labeled as products of China, further diminishing Hong Kong’s status as a distinct trade entity.
As tensions between China and the U.S. continue to escalate, Hong Kong’s challenge to the U.S. tariffs at the WTO marks a new chapter in the ongoing trade dispute.
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