Financial Secretary Paul Chan Mo-po highlighted measures the city would take in his weekly blog on Sunday after US President Donald Trump imposed an additional tariff of up to 145 per cent on goods from mainland China and Hong Kong, and raised charges for US-bound small parcels as a trade war between Washington and Beijing escalated.
Other steps include support for small and medium-sized enterprises through the provision of liquidity by local banks and greater risk protection via the Hong Kong Export Credit Insurance Corporation.
“Even if Washington slightly adjusts its measures, it has not made any fundamental changes and investors’ pessimism remains,” Chan said.
Earlier in the day, the financial secretary delivered a speech at the opening of the four-day Business of Innovation and Technology Week, saying Hong Kong’s arms were wide open for business.
“We gather at a pivotal moment,” he said to VIPs and guests. “We are witnessing a shifting global landscape marked by a daunting trade war and technological fragmentation. Trade patterns, industrial chains, supply chains and partnerships are being reshaped. In this ‘new normal’, many businesses will have to find new collaborators, explore untapped markets and embrace more agile business models.”
Despite the turbulence, Hong Kong remained welcoming to businesses and talent from around the world, he said.
“We are eager to establish new connections and forge new partnerships,” he said. “These are in our DNA. Rest assured that our free-port status and free-trade policy remain unshaken. We are firm in our commitment to the free flow of capital, goods, talent and information.”
On the back of a sudden surge in American bond yields, which cast a shadow on US Treasuries as safe-haven assets, Trump abruptly announced on Thursday that tariffs on all of the United States’ trade partners but China would be put on hold for 90 days.
In his blog post, Chan pointed to Chinese President Xi Jinping’s recent comments that there were no winners in a tariff war and that the country would press ahead with its objectives to advocate for fairer, more inclusive economic globalisation and free trade.
Markets around the world have been through a roller-coaster ride as stocks first tumbled before rebounding, which Chan said highlighted investors’ jitters over a possible recession in the US and pessimism on the global economy.
Chan said the US’ extreme tariff measures violated World Trade Organization regulations and seriously undermined the confidence of its trade partners and investment markets.
Many countries were reassessing investment risks in the US market, accelerating the exploration of investment allocations and speeding up trade alliances with other partners, while looking into settling trade in local currencies instead of the US dollar, he said.
In Hong Kong, the Monetary Authority had collaborated with banks to introduce targeted support measures to help SMEs access financing and facilitate their transformation, Chan said.
This includes flexible repayment terms for trade finance loans and dedicated funds amounting to more than HK$390 billion (US$50.27 billion) for SMEs.
Hong Kong would accelerate the pace of attracting foreign capital, talent and businesses to the city, Chan said.