Hong Kong set for pain from tariff rises after Trump win but businesses ready, experts say

Hong Kong economy will inevitably be hurt as the US is likely to raise tariffs on Chinese goods and toughen tech policies, academic says

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Donald Trump’s victory speech is broadcasted in an electronics shop in Sham Shui Po on November 6, 2024. Photo: Dickson Lee

Published: 8:30am, 7 Nov 2024Updated: 11:25am, 7 Nov 2024

Hong Kong may face immediate pain from tariff increases promised by Donald Trump when he moves back into the White House, but businesses are largely prepared and the incoming US president’s transactional approach may open up room for some relief, experts have said.

One economist even predicted that Trump’s victory in the US presidential election might on balance “actually be good” for Hong Kong as Beijing would have to reprioritise the economy over politics in the face of geopolitical uncertainty.

Trump, who initiated a trade war with China in his first term as president and promised further tariff rises in his recent election campaign, is set to return to the White House in January, with multiple media outlets declaring him the winner of Wednesday’s poll.

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Chen Zhiwu, chair professor of finance at the University of Hong Kong, said the Hong Kong economy would inevitably be hurt as the US was likely to raise tariffs on Chinese goods and toughen policies on technology transfers and tech investments in China. But he said he also expected the new tariffs to be capped at 60 per cent.

The former Yale University professor pointed to one of Trump’s biggest supporters, tech billionaire Elon Musk, as a possible taming force in policymaking related to China during Trump’s second term.

He also anticipated more aggressive stimulus efforts from Beijing to counter the greater geopolitical uncertainty.

“Thus, on balance, this US election outcome may actually be good for Hong Kong, at least to the extent that it makes the leadership in Beijing reprioritise economic development over politics,” Chen said.