Why the US Wants to Strip Hong Kong of its Special Trade Privileges

Amidst growing hostilities with China, the Trump administration has now set its sights on Hong Kong for its latest salvo of measures targeting Chinese access to U.S. technology. The city's famed status as an entrepôt for U.S.-China trade has finally caught up with it amid decoupling between the world's two largest economies in various areas including technology supply chains.

This poses challenges to companies in China, the U.S. and Hong Kong. For PRC entities, what is at stake is their ability to access U.S. technology via Hong Kong, where import restrictions are looser than the rest of China. Meanwhile, U.S. suppliers face uncertainty in their ability to tap the vast Chinese market through distributors and business partners in Hong Kong. And for Hong Kong companies themselves, the latest chapter in the saga of U.S.-China decoupling threatens to undermine their roles as connecting agents between U.S. suppliers and PRC customers.