Trump tariffs would be bad news for Hong Kong’s biggest exports to US: experts US President Donald Trump’s threat to slap 10 per cent tariffs on Chinese goods could spell bad news for Hong Kong’s biggest exports to the country, telecoms and technology equipment, experts warned on Wednesday, calling it a lose-lose situation. The city’s academics and business operators said the knock-on effects of tariffs could mean inflationary pressures for US consumers and hit the Hong Kong government’s already depleted coffers with lower income from profits tax. “There is no benefit for them, aside from feeling like they’ve done something, it’s performative. It’s policymaking not based on evidence or logic,” said Professor Alejandro Reyes of the University of Hong Kong’s department of politics and public administration. Trump said on Tuesday the tariffs would take effect on February 1, without revealing any other details, to penalise China because fentanyl was being sent from the country to the United States, causing thousands of deaths annually. Reyes said the Chinese side would think whether there were negotiations or offerings that could prevent the tariffs, and that it was important for Trump to look like he had wrangled something out of Beijing. He said the imposition of tariffs was likely to negatively affect Hong Kong businesses as the local economy was closely linked to the mainland’s. Reyes added that the resulting inflationary effects on the US could spill out to economies such as Hong Kong, which relies on imported products. “I foresee that if you do impose yet more tariffs on Chinese goods, the inflationary impact will certainly be felt mainly in the United States,” he said. “But again, because of supply chains and the products you import from different places that then go into manufacturing that is done in the United States, or whatever Chinese products are used for, that could increase the prices of those products. “The inflationary impact will broaden and widen.” The government pointed out in October last year that the US had a trade surplus of US$271.5 billion with Hong Kong over the past decade, the largest among the country’s global trading partners. In the first 11 months of last year, the city exported HK$273.7 billion (US$35 billion) worth of goods to the US, marking an 11 per cent year-on-year increase, according to the Census and Statistics Department. In 2023, Hong Kong’s biggest commodity export to the US was telecoms equipment and parts, fetching US$8.1 billion, followed by computers, which reached US$3.1 billion, data from the Hong Kong Trade Development Council showed. According to the council, the US was Hong Kong’s third-largest trading partner in 2023, accounting for 5.4 per cent of the total, the second-largest export market, at 6.5 per cent of the total, and the sixth-largest import market, at 4.3 per cent of the total. Danny Lau Tat-pong, honorary chairman of the Hong Kong Small and Medium Enterprises Association, said while details of the tariffs were yet to be announced, they could greatly reduce the city’s exports’ competitiveness in the US market once implemented. Lau estimated that exports to the US would drop by over 10 per cent and noted the indirect impact of the tariffs on Hong Kong, including a lower profits tax take for the government from local businesses. He added that local businesses’ diversification should not be restricted to their markets, but also their production, in response to the tariffs. “In the long-run, manufacturers should consider establishing a production line outside the country that caters to the American market, but in the short-run, there is not much one can do,” Lau said. He said that if a company could not afford to start another production line elsewhere, it could be forced to give up on the American market if it took up a large portion of its business. Lau noted that other countries, such as Mexico, could also face tariffs with many unknowns. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3295857/trump-tariffs-would-be-bad-news-hong-kongs-biggest-exports-us-experts (ICE HONG KONG)

Fonte notizia: South China Morning Post