Secretary for Commerce and Economic Development Edward Yau says Hong Kong is worried about the worsening trade row between China and the US given that 17 per cent, or HKD60 billion (US$7.6 billion) worth of Chinese exports in question passed through the city to the US, and nine per cent, or HKD6 billion, of US exports were transshipped via the city to mainland China.
"We are worried about the worsening Sino-US trade dispute and it is a pity to see that the goodwill the two countries built over the years is being lost," Mr Yau told the SCMP in a phone interview from Paris, France while on a business tour with Chief Executive Carrie Lam.
"We fear that the trade war will become an irreversible step as each side only cares about its own interests," he said.
Hong Kong also faced an "unquantifiable impact from the spillover" of the dispute between the US and Europe, which could lead to trade being diverted from Hong Kong, he said.
Beijing and Washington are ensnared in a tit-for-tat trade row, with China on June 19 vowing to use quantitative and qualitative measures to retaliate if US President Donald Trump's threat to impose a 10 per cent punitive tariff on US$200 billion worth of Chinese products went into effect.
Following Mr Trump's announcement on June 15 to impose 25 per cent tariffs on $50 billion worth of Chinese imports, Beijing responded by publishing a list of US products - ranging from soybeans to cars - that it would subject to retaliatory measures of the "same scale and intensity." Beijing calculated that the value of US product imports last year was $154 billion.
"Hong Kong can withstand the tariff tsunami if it continues to develop its regional relationships and Greater Bay Area and advancing on IT development," said American Chamber of Commerce in Hong Kong president Tara Joseph, referring to Beijing's plan to develop Hong Kong, Macau and nine cities in Guangdong into a new economic zone and IT-led powerhouse rivalling Silicon Valley in the US.
According to the Hong Kong government's trade figures, Asean became the city's second largest trade partner after mainland China last year in total trade. The Association of Southeast Asian Nations is an economic bloc comprising Indonesia, Malaysia, Singapore, the Philippines, Thailand, Brunei, Cambodia, Laos, Myanmar and Vietnam.
Federation of Hong Kong Industries chairman Jimmy Kwok said Hong Kong companies in the re-export and transshipment business would be hit hardest.
"The trade war has spread to food such as meat and fish, which to some extent will put them in trouble," Mr Kwok said.
Sources:HKSG Group
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