The United States is set to restore Hong Kong's special trade status after allowing a Trump-era executive order to lapse, according to China's Ministry of Commerce. If confirmed by Washington, the move would mark a significant shift in US policy towards Hong Kong after nearly six years.
The executive order, signed by then-US President Donald Trump in July 2020, ended Hong Kong's preferential trade treatment following Beijing's introduction of a national security law in the city. The order had been renewed annually since then.
According to China's commerce ministry, the United States has indicated that it will not extend the order after its latest renewal period expired this week. However, the White House had not commented on the development at the time of publication.
What was Hong Kong's special trade status?
Before 2020, Hong Kong enjoyed a separate economic and trade status from mainland China under US law.
The arrangement was based on the principle that Hong Kong remained a separate customs territory with a high degree of autonomy following its 1997 handover from Britain to China.
The special status allowed Hong Kong to receive preferential treatment in areas such as export controls, customs and trade regulations, which differed from those applied to mainland China.
The Trump administration revoked that status in response to Beijing's national security law, arguing that Hong Kong was no longer sufficiently autonomous from China.
China welcomes the move
China's Ministry of Commerce welcomed the reported decision, describing it as a positive step towards implementing the understandings reached during recent trade discussions between Beijing and Washington.
"The US adjustment of its Hong Kong policy in a more positive direction also aligns with the widespread expectations of the international community," the ministry said in a statement.
It also urged the United States to respect China's sovereignty and Hong Kong's legal system, restore normal trade and economic exchanges with the city and contribute to improving overall US-China relations.
The reported policy shift comes after recent trade negotiations between the world's two largest economies that resulted in tariff reductions and efforts to stabilise bilateral relations.
Potential impact on trade
If the policy change is formally implemented, Hong Kong could once again receive preferential treatment under US export control and trade rules instead of being treated the same as mainland China.
Businesses operating in the financial hub could benefit from easier access to certain US technologies and trade arrangements that were restricted after 2020.
The Hong Kong government also welcomed the reported move, calling it a positive development for the city's economic and commercial ties with the United States.
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Security law remains controversial
China imposed the national security law on Hong Kong in 2020 following months of anti-government protests in 2019.
Supporters of the legislation argue that it restored stability and public order in the city after prolonged unrest.
However, critics, including several Western governments and human rights groups, have argued that the law has significantly curtailed the civil liberties and political freedoms promised to Hong Kong under the "one country, two systems" framework.
The United States began dismantling Hong Kong's special status in June 2020 by ending defence exports to the territory and restricting access to sensitive technologies before formally revoking its preferential trade treatment.
If Washington confirms the reported decision to let the executive order expire, it would represent one of the most significant policy reversals in US-Hong Kong relations since 2020.
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