Trade observers are watching carefully following last week’s decision by President Donald Trump to sign legislation expressing support for Hong Kong protesters. In response, China threatened retaliation just as the two nations seemed close to signing a “phase one” agreement, Bloomberg reported.
China summoned U.S. Ambassador Terry Branstad for a formal meeting in which Vice Foreign Minister Le Yucheng told the U.S. to “stop meddling in Hong Kong affairs.” He warned that such actions would strain ties and risk affecting “cooperation in important areas.” Earlier, the foreign ministry reiterated threats of retaliation with no specifics, Bloomberg said.
Hu Xijin, the editor-in-chief of state-run Global Times, said Thursday in a tweet that China was considering putting the U.S. drafters of the law on a no-entry list.
The new law requires annual reviews of Hong Kong’s special trade status as well as sanctions against any officials deemed responsible for human rights abuses or undermining the city’s autonomy. A second Hong Kong measure also bans the export of crowd-control items such as tear gas and rubber bullets to the city’s police.
While signing the bills, President Trump signaled that he “didn’t want the broader relationship with China to veer off track.” He expressed concerns with unspecified portions of the new law, saying they risked interfering with his constitutional authority to carry out American foreign policy.
“I signed these bills out of respect for President Xi, China, and the people of Hong Kong,” Trump said. “They are being enacted in the hope that leaders and representatives of China and Hong Kong will be able to amicably settle their differences leading to long term peace and prosperity for all.”
Investors are watching closely for signs that the new measures might derail the proposed deal being counted on to de-escalate a trade war that’s dragged on for 20 months. President Trump would like the agreement finished in order to ease economic uncertainty for his campaign in 2020. China also is looking to avoid further damage to an economy growing at the slowest pace in decades.
China is irked that the bill will bolster Hong Kong protesters who have become increasingly violent in their bid to secure demands including an independent inquiry into police abuses and meaningful elections, but it probably won’t affect trade talks much, said David Zweig, an emeritus professor at the Hong Kong University of Science and Technology and director of Transnational China Consulting Ltd.
Hong Kong’s protesters cheered the bill’s passage and lauded President Trump for signing it into law. President Trump actually had little choice but to sign the bill, since the House cleared it 417-1 on Nov. 20 after the Senate passed it without opposition – majorities that would allow an override of any veto by the president, Bloomberg said.
While many members of Congress in both parties had voiced strong support for the protesters who are demanding greater autonomy for the city, President Trump stayed largely silent, even as the demonstrations have been met by rising police violence. Last week, Senate Majority Leader Mitch McConnell, a Kentucky Republican, called on the president to speak out, saying that “the world should hear from him directly that the United States stands with” the protesters.
China’s foreign ministry had repeatedly urged Trump to prevent the legislation from becoming law, warning the Americans not to underestimate China’s determination to defend its “sovereignty, security and development interests.”
Chinese foreign ministry spokesman Geng Shuang dodged questions on whether trade talks would be affected as he briefed reporters in Beijing late last week. “We strongly urge the U.S. to refrain from implementing this law or it will undermine our bilateral relations and cooperation in important areas,” he said in response to a question on how the bill’s signing would impact the negotiations.
Before a speech at the recent Bloomberg New Economy Forum in Beijing, China’s Vice Premier Liu He – the country’s chief trade negotiator – said that he was “cautiously optimistic” about reaching the phase one accord.
Relations with China appear to be particularly fragile just now, although both sides are quick to say they are still working toward the “beginning” of a major deal – in spite of continued questions of what, exactly, might be included. Certainly, these continuing talks are enormously important and should be watched closely by producers as they proceed, Washington Insider believes.
Welcome
