The U.S. is considering a range of sanctions
to punish China for its crackdown on Hong Kong, people familiar
with the matter said, as the Trump administration weighs whether
to declare the former colony has lost its autonomy from Beijing.
The Treasury Department could impose controls on
transactions and freeze assets of Chinese officials and
businesses for implementing a new national security law that
would curtail the rights and freedoms of Hong Kong citizens.
Other measures under consideration include visa restrictions for
Chinese Communist Party officials, according to two of the
people.
Inter-agency discussions are ongoing and no decision has
been made on whether or how to employ the sanctions, said the
people, who spoke on condition of anonymity because the moves
are still under consideration.
President Donald Trump, asked about the possible sanctions
at the White House on Tuesday, said his administration is “doing
something now” that he will unveil later this week.
“It’s something you’re going to be hearing about over the
next — before the end of the week,” Trump said. “Very
powerfully, I think.”
A Treasury Department spokeswoman declined to comment.
The news hit U.S. stocks in the final hour of trading
Tuesday, with the S&P 500 Index losing almost half its gain.
Futures were higher on Wednesday in Asia, however, as investors
weighed deteriorating Sino-American relations against
encouraging prospects for recovery in major economies.
The State Department is to certify Hong Kong’s autonomy
under the Hong Kong Human Rights and Democracy Act that Trump
signed into law last year — and a negative determination could
see the U.S. reconsider Hong Kong’s special trade status. A
senior administration official said the certification
announcement could come within a week and said it was doubtful
that the U.S. could certify Hong Kong’s autonomy under current
circumstances.
Under the U.S.-Hong Kong Policy Act of 1992, Washington
agreed to treat Hong Kong as fully autonomous for trade and
economic matters even after China took control. That means Hong
Kong is exempt from Trump’s punitive tariffs on China, can
import certain sensitive technologies and enjoys U.S. support
for its participation in international bodies like the World
Trade Organization.
Sanctioning individual Chinese officials and entities would
leave in tact the broader trading relationship, which serves the
interests of hundreds of American companies with regional
headquarters in Hong Kong. The U.S. wants to maintain influence
among Hong Kong residents in order to promote democratic
freedoms in the city, which are still more advanced than any
territory under China’s control.
The Trump administration is under increased pressure from
Republicans and Democrats in Congress to respond firmly to
China’s plans to assert more control over Hong Kong. Yet the
U.S. faces a challenge in hitting back at China because any
harsh penalties aimed at Beijing would likely also harm both
Hong Kong — and the U.S.
The business and investor community has been anxiously
watching tensions rise in recent days. The U.S. Chamber of
Commerce on Tuesday called on the Chinese government to preserve
Hong Kong’s “One Country, Two Systems” framework and on the
Trump administration to continue to pursue a constructive
relationship between the U.S. and Hong Kong.
“It would be a serious mistake on many levels to jeopardize
Hong Kong’s special status, which is fundamental to its role as
an attractive investment destination and international financial
hub,” the business group said in a statement.
White House Press Secretary Kayleigh McEnany said Tuesday
that the president is “displeased” with China’s efforts and
“that it’s hard to see how Hong Kong can remain a financial hub
if China takes over.” She declined to elaborate about specific
actions the president was considering.
Beijing has repeatedly warned the U.S. not to interfere in
what it considers a domestic matter.
(Bloomberg)