Businesses that will suffer as a result of the trade war between the US and China will get help, Hong Kong Secretary for Commerce and Economic Development Edward Yau said yesterday, noting that the government has in place some financing schemes to assist small and medium-sized enterprises (SMEs) should the need arise.
He said there are additional measures by the Hong Kong Export Credit Insurance Corporation to insure exporters and to manage some of the risks of tit-for-tat tariffs.
Mr Yau was speaking after the fourth meeting with key stakeholders in Hong Kong, including SMEs, associations, semi-government bodies such as the Trade Development Council and the Hong Kong Export Credit Insurance Corporation on the possible fallout from the trade fight between the US and China.
On July 6, the United States imposed a 25 per cent tariff on US$34 billion (S$46 billion) worth of Chinese goods, which led to China raising tariffs on over 100 imports from the US. This was on top of the steel and aluminium duties that were already in effect.
On July 10, the White House released a list of 10 per cent tariffs on US$200 billion in Chinese goods, following through on President Donald Trump's threat of additional punitive measures.
Mr Yau said the total impact of both rounds of tariffs will be felt on HK$130 billion (S$23 billion) worth of goods, which is about half of the total value of goods exported from China to the US via Hong Kong and makes up 2.2 per cent of the city's total exports.
While no company has felt the effects of the trade war so far, he said, trade members are anxious and particularly concerned about how businesses would fare in the later half of the year.
While no company has felt the effects of the trade war so far, Mr Edward Yau said, trade members are anxious and particularly concerned about how businesses would fare in the later half of the year.
He noted that higher tariffs on goods would be added cost to businesses and this cost "would have to be passed on either to the production side or to the consumer side".
"In any case, Hong Kong as a major trading centre, we will easily be hard hit in the forefront so we need to be very vigilant on that," he added.
Speaking to reporters after the meeting, chairman of the Federation of Hong Kong Industries, Mr Jimmy Kwok, said the tariffs could lead to a 10 per cent rise in business costs, most of which would be passed on to US consumers.