The trade war between the US and China has been likened to an approaching tsunami. American consumers would have to pay more, factories could be forced out of China or out of business, and the sophisticated supply chain China has built in recent decades could be broken.
As a link between the two countries, Hong Kong would feel the knock-on effect if the trade war means less cargo passing through the city’s ports. The US is seen as having overpushed the tariffs issue and stands to antagonise all parties, from consumers and US retailers to the whole supply chain. It is not clear what the US wants negotiations on – tariffs, the South China Sea issue, investment in Africa, intellectual property or technology transfers. The country has moved the goalposts in the political game with China from American joblessness to trade deficits and lately to currency manipulation.
America imports 41 per cent of clothing, 72 per cent of footwear and 84 per cent of accessories, such as bags, from China. China and the US have crossed swords since July when the first wave of tit-for-tat tariffs on goods kicked in. The US imposed its latest round of 10 per cent tariffs in September, on $200 billion worth of Chinese products – mostly food and consumer goods. The tariffs will jump to 25 per cent on January 1 next year.