US Revokes Hong Kong’s “Special Status”

Fox Rothschild LLP

Fox Rothschild LLP

Pursuant to an Executive Order issued July 14, the United States is supending the “special status” afforded Hong Kong under the United States-Hong Kong Policy Act of 1992. The loss of status will have the effect of removing “different treatment for Hong Kong as compared to China,” as stated in the EO. While this move has implications reaching far beyond issues of international trade, the suspension/revocation will have significant impacts upon trade with Hong Kong – including the revocation of license exceptions for exports/transfers of regulated articles, and preferential tariff treatment afforded to products imported from Hong Kong. “Hong Kong will now be treated the same as mainland China – no special privileges, no special economic treatment, and no export of sensitive technologies,” Trump stated.

The revocation was announced in conjunction with enactment of the Hong Kong Autonomy Act, which imposes sactions upon those (including foreign financial institutions) who aid in or contribute to China’s alleged attempts to remove Hong Kong’s economic and administrative autonomy. Both China and Hong Kong have spoken out against what they describe as American interference in wholly internal matters, and China has already threatened retaliatory action.

CBP issued guidance scheduled to be published on August 11 concerning the marking requirements for goods of Hong Kong origin. Effective September 25, Hong Kong goods entered or withdrawn from warehouse for consumption must be marked as products of China. Presently, it remains unclear if Hong Kong goods will be subject to the additional Section 301 tariffs imposed on most Chinese products; however, the current view appears to be that the additional Section 301 tariffs will not be imposed.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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