Hong Kong to complain to WTO on U.S. tariff decision
Last Updated on February 10, 2025 6:45 am
The Hong Kong government will proceed with launching a complaint with the World Trade Organization (WTO) over the United States’ decision to levy an additional 10 per cent tariff on products from the city, an escalation analysts say is important but unlikely to sway the Trump administration.
Secretary for Commerce and Economic Development Algernon Yau Ying-wah also met several of the city’s business chambers on Friday to discuss ways to cope with the tariffs and called on the groups to “unite” against the “unreasonable actions” by the US.
A government spokesman said trade measures announced by US President Donald Trump were “grossly inconsistent” with WTO rules and ignored the city’s status as a separate customs entity from mainland China.
“The … government will formally launch procedures in accordance with the WTO dispute settlement mechanism against the US’ unreasonable measures to defend our legitimate rights,” he said.
Hong Kong was a “staunch supporter” of the rules-based multilateral trading system and the government had urged the US to take immediate action to “rectify its wrongdoing”, he added.
On February 1, less than two weeks into his second term, Trump signed an executive order imposing an additional 10 per cent tariff on Chinese imports, including those from Hong Kong. The measures came into effect on Tuesday.
Among the city’s major business lobbies Yau met were the Hong Kong General Chamber of Commerce, the Chinese General Chamber of Commerce and the Chinese Manufacturers’ Association of Hong Kong.
According to the Commerce and Economic Development Bureau, Yau told the groups authorities were actively following up on the tariffs through multiple levels of government.
He also called on the business community to “unite and respond” to the “unreasonable” measures taken by the US.
Yau said the government would continue to closely monitor the situation and maintain contact with the business community to “safeguard the legitimate rights of Hong Kong”.
A day earlier, Yau brushed aside concerns about the impact of the 10 per cent levy, noting Hong Kong’s exports to the US accounted for only 0.1 per cent of the city’s total.
But he also dismissed the idea of retaliatory measures against the country, citing the city’s status as a free port.
Earlier this week, Beijing launched its own dispute case with the WTO, as well as introduced retaliatory measures over Trump’s tariffs.
The moves, unveiled minutes after the US measures took effect, included a 10 to 15 per cent increase in tariffs on certain US imports, export restrictions on some critical minerals, the addition of two American companies to a Chinese government blacklist and an antitrust investigation targeting California-based tech giant Google.
Lau Siu-kai, a consultant to the semi-official Chinese Association of Hong Kong and Macau Studies think tank, said he doubted a WTO ruling would change the US government’s behaviour given its paralysis of the international trade body’s appellate mechanism.
But Lau said the body was nonetheless likely to rule in Hong Kong’s favour, providing some “moral assuagement” for the city.
“In any case, Hong Kong needs to do something in protest against wrongful behaviour and show the people inside and outside [the city that it] is a staunch supporter of free trade and an opponent of protectionism and will not succumb to economic coercion meekly,” Lau said.
The WTO’s Dispute Settlement Body ruled in favour of the city in 2022, after the government lodged a complaint about a controversial requirement by the US that the city’s exports to the country be marked as “Made in China”.
The US lodged an appeal soon after. But the system has been effectively paralysed since 2019 following the collapse of its Appellate Body, which has the final say on disputes.
Trump’s first administration and that of Joe Biden blocked the appointment of new judges to the Appellate Body over what they saw as judicial overreach in disputes.
The body is unable to function with less than three judges.
Lawmaker Doreen Kong Yuk-foon said that by lodging its own complaint with the trade body, Hong Kong was effectively sending “a clear signal to the world” the city continued to operate under the “one country, two systems” governing principle.
Whether the move would be effective was less important as she doubted Trump would change his mind in light of a ruling in the city’s favour, she said.
“Hong Kong must do whatever we [can] to protect our status,” she said. “If we do not do anything, I think that is not clear enough.”
Financial Secretary Paul Chan Mo-po earlier this week warned that the tariffs could prolong Hong Kong’s high interest rate environment, putting a burden on some businesses and affecting the asset market.