The Trump administration has promised strong action against China over its national security law in Hong Kong, but its options may be limited because any harsh penalties aimed at Beijing would likely also harm both Hong Kong — and the U.S.
While Secretary of State Michael Pompeo indicated Friday that the U.S. could reconsider Hong Kong’s special trade status, taking such broad action risks causing harm to U.S. interests. The administration potentially could take a narrower approach, such as sanctioning individuals or businesses involved in curtailing Hong Kong’s democracy, or by maintaining special treatment of the territory for sensitive technologies.
Businesses and investors are anxiously watching the developments, which could have far-reaching implications for the U.S.-China relationship. Earlier this week, China reiterated a pledge to implement the first phase of its trade deal with the U.S. despite setbacks from the coronavirus outbreak, though the January agreement has come under threat as the two nations escalate disputes on many fronts.