China’s move to deepen its legal authority over Hong Kong on national security grounds stokes a political crisis that could leave President Trump with few good options, according to Western sources and Hong Kong leaders.
“A lot of what is available … really punishes the people of Hong Kong when you really want cost imposition to hit the CCP,” former assistant secretary of defense Randall Schriver, the Pentagon’s top Indo-Pacific security official in 2018 and 2019, said Thursday.
Secretary of State Mike Pompeo has warned Beijing repeatedly in recent weeks to tread carefully. The Trump administration has delayed certifying that Hong Kong’s political situation warrants continued special economic treatment from Congress, in the hopes that the threat of a negative review might discourage the mainland government from continuing to crack down on the semi-autonomous territory.
“These developments are of grave concern to the United States and could lead to a significant reassessment on U.S. policy towards Hong Kong,” he said Friday.
But ending Hong Kong’s special status would subject the territory to the same policies that govern U.S.-China economic ties, such as the tariffs involved in the recent trade war and restrictions on exports. It could also drive a wedge between Hong Kong’s currency and the U.S. dollar, which is “immensely important” for Hong Kong and the broader Chinese economy, Hong Kong opposition lawmaker Dennis Kwok said during a Heritage Foundation webinar Friday.
Removing the Hong Kong currency’s peg to the U.S. dollar would cause its value to fall and harm investment.
Chinese officials declared their intention to override local Hong Kong laws by advancing national security legislation as a way to crack down on the political protests that rocked the city over the last year. That decision dooms the freedoms enjoyed by the former British colony, observers say, setting the table for the Trump administration to declare that the territory has lost the “high degree of autonomy” that led the U.S. to give Hong Kong special economic status in recent decades.
“This is almost like a nuclear option which, once you use it, everyone will get hurt, and it will be very hard to build Hong Kong back up again,” Kwok said.
Chinese communist officials have been undeterred by Pompeo, with a senior official saying that they plan to “take strong measures to prevent, stop and punish” the protests in Hong Kong before such dissidence spreads to the mainland.
“If the West acts in unison and coordinates, there have been times when China does back down,” a European source said. “I just think it becomes increasingly difficult as China gets increasingly belligerent and doesn’t care.”
So, the most likely way for Trump to retaliate remains the move to revoke Hong Kong’s special economic status, an unattractive option given that it would just accelerate Beijing’s plan for the de facto city-state to become just another Chinese city.
“On the merits, that makes sense, but again, you’re going to hurt the people of Hong Kong, you’re going to hurt U.S. business interests and U.S. broader interests, and where you really want to impose costs is in Beijing,” Shriver said.
