A full-blown trade war between the US and China could harm investor confidence in Hong Kong and deal a blow to the city’s stock and capital markets, former US Federal Reserve Bank economist and now deputy to China’s legislature David Wong Yau-kar has said.
Wong issued the warning on Friday after US President Donald Trump signed off on tariffs of 25 per cent on steel and 10 per cent on aluminium imports, raising the stake of a trade war. Canada, which represents 41 per cent of US steel imports, and Mexico are exempt from the tariffs.
Hong Kong’s Commerce and Economic Development Bureau reacted by saying the government “regrets and disapproves” the US’s decision.
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A spokesman said the bureau has recently filed a formal representation to the US and has registered “grave concern” at the General Council meeting of the World Trade Organisation. The government will study the latest tariff in detail and “continue to pursue the matter on the WTO front and with the US administration with our justified arguments and strong grounds to minimise the impact on our industry”.
Other business veterans from Hong Kong said while the steel and aluminium tariffs have not hurt the city’s economy yet, the city must monitor the US’s every moves closely.
“So far, (the tariffs) have not had a huge impact on the whole (global) economy. But trade has now been used as a weapon, and that cannot be good for the trading system,” Wong, a Hong Kong deputy to the National People’s Congress, said on the sidelines of the annual parliamentary meetings.
“Hong Kong is such a free economy that it is dependent on trade. Any trade wars could have profound impacts on the city. In the end, investor confidence, the stock market and the capital market would be affected.”