Trump’s tariffs to push Hong Kong manufacturers to leave mainland China: experts US president-elect Donald Trump’s plans to slap more tariffs on Chinese goods will spur mainland China-based Hong Kong manufacturers to turn to new markets such as Southeast Asia and the Middle East, in addition to hitting the city’s economy and exports, industry leaders and analysts have said. But some Hong Kong business representatives also argued on Tuesday that the manufacturing sector was well-prepared for any new punitive measures, having weathered the Sino-US trade war that began in 2018. Trump said on Monday he would impose an additional 10 per cent tariff on goods from China as well as a 25 per cent levy on all imports from Canada and Mexico. He previously threatened to apply a universal 60 per cent tariff on all Chinese imports. Wingco Lo Kam-wing, president of the Chinese Manufacturers’ Association of Hong Kong, conceded the tariff increase would have an impact on companies based in the city as the European and US markets made up a significant portion of their business. “We’ve noticed an uptick in orders recently. Maybe our partners are also concerned about the rise in tariffs,” Lo said on the sidelines of a business forum in Foshan, Guangdong province. “We have already prepared ourselves since the trade war a few years ago and have set up factories in Southeast Asia.” Lo added that if the US were to increase import taxes on Chinese goods, local businesses could consider switching to new markets such as Southeast Asia, the Middle East or Africa. Trade Development Council chairman Peter Lam Kin-ngok, who also chairs the Lai Sun Development Company, said the 10 per cent tariff rise could also worsen America’s domestic inflation if imported goods became more expensive. But he said that with its population of 1.4 billion, China remained an attractive consumer market for foreign businesses. “This large consumer market can attract overseas investors and use Hong Kong as a base for investing in mainland businesses,” Lam said at the same event. He added that many mainland electronics manufacturers were still seeing high demand, especially from new markets in Southeast Asian and European cities. Lo and Lam are part of Chief Executive John Lee Ka-chiu’s delegation of more than 80 officials, tycoons and business representatives visiting Guangdong. The group will visit five cities in the province before returning to Hong Kong on Wednesday. Simon Lee Siu-po, of the Chinese University of Hong Kong’s Shenzhen Finance Institute, also discussed the potential impact of Trump’s planned tariff increase and said it marked just the beginning of more punitive measures. The finance scholar also said that companies in Hong Kong and on the mainland needed to prepare for the worst. “This will kick off a long negotiation process between the two nations, with the final results depending on whether China will make some concessions such as over human rights and more market access for the US,” Lee said. “Mainland and Hong Kong companies must be prepared for a painful and difficult process during this tug of war. There may be companies shutting down.” Regarding the potential effect on Hong Kong, Lee said Trump’s tariff rise would hit the city’s exports hard and drag down the local economy. “Hong Kong will experience economic contractions after the tariffs take effect as the city’s exports, which account for a sizeable part of gross domestic product, will be adversely impacted,” he said. Lee said both mainland and Hong Kong businesses should speed up relocation efforts and explore other emerging markets such as Southeast Asia to ease the impact of Trump’s punitive measures. “Trump may continue to slap tariffs on China in the future. This may be a starter,” he warned. The senior economist agreed that mainland-based manufacturers would need to speed up relocation efforts and look for alternative markets to counter the economic impact of increased duties. “Chinese firms need to shift the supply chain to Asean countries to offset the negative impact, and they must prepare for the fact that economic tensions will continue to escalate,” he added. Ng said expected the city’s future export levels would be worse than this year’s current performance, given the deteriorating external environment. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3288186/trumps-china-tariff-rise-push-hong-kong-manufacturers-leave-mainland-experts (ICE HONG KONG)

Fonte notizia: South China Morning Post