America’s new tariffs on Chinese imports could trigger domestic inflation in the United States, potentially prolonging Hong Kong’s high interest rate environment and putting pressure on locally based businesses, the city’s finance chief has warned.
Hours earlier, US President Donald Trump signed three executive orders imposing 10 per cent tariffs on Chinese imports and 25 per cent levies on goods coming from Canada and Mexico.
The measures take effect on Tuesday.
Chan said he expected the resulting added costs of the tariffs would be passed on to American consumers, triggering higher inflation in the US, at a time when Trump’s administration was seeking to aggressively boost investment and infrastructure in the country.
“High inflation [in the US] will affect us, as interest rates will also be high. As the Hong Kong dollar is pegged to the US dollar, our relatively high interest rate environment will persist for a period of time,” Chan told a radio show.
