Washington’s decision to impose reciprocal tariffs on Chinese goods could force Hong Kong manufacturers to cut jobs or even close down, as many businesses are set to struggle to navigate global trade frictions, analysts have warned.
Experts also said the sweeping tariffs would create a vicious cycle where consumption in the US would greatly diminish due to rising prices for imported goods, resulting in Hong Kong exporters struggling to survive the drop in demand and the risk of interest rate increases.
“The US’ sweeping tariffs have targeted all Chinese, wherever they are. No matter where Chinese exporters relocate, they will be subject to the high tariffs there,” Dennis Ng Kwok-on, vice-president of the Chinese Manufacturers’ Association of Hong Kong, told the Post.
“There is no way out now, and nothing can be done. Chinese manufacturers have moved to other places such as Vietnam and Cambodia to ward off this risk, but now this is inescapable.
“Hong Kong’s manufacturers are set to face staff cuts or even bankruptcies as they can’t stomach the massive tariffs themselves and will pass on the extra cost to consumers, which will drive business down.”
Ng said the only way out could be for such companies to move to Mexico, which was excluded from the latest US tariffs. Mexico is still subject to prior tariffs.
Executive Councillor and lawmaker Jeffrey Lam Kin-fung said a lot of firms in the process of relocating their production lines to Southeast Asian countries had immediately put the move on hold.
