Ag trade experts are working to assess how President Donald Trump's call for an end to preferential trade treatment for Hong Kong will impact American ag exports there, but say there appears to be no direct impact on the "phase one" trade deal with China.

“From what was said today I do not see any direct impact on ‘phase one’ for agricultural trade with China,” American Farm Bureau Federation Senior Director David Salmonsen tells Agri-Pulse. But when it comes to ag exports to Hong Kong, he added: “We will have to see exactly what the Administration does to see if it will have trade impacts.”

U.S. and Chinese bilateral meetings to maintain the “phase one” trade pact have been continuing without interruption, even as the volume of U.S. complaints about China have increased, sources tell Agri-Pulse.

“I am directing my administration to begin the process of eliminating policy exemptions that give Hong Kong different and special treatment,” Trump said after berating China for its push to stifle all political dissent in Hong Kong. He promised the U.S. will “take action to revoke Hong Kong’s preferential treatment as a separate customs and travel territory from the rest of China.”

The U.S. doesn’t give Hong Kong – which has its own World Trade Organization membership and base tariff rates – any preferential treatment when it comes to ag trade. Except for alcohol and tobacco products, Hong Kong charges no tariffs on U.S. ag commodities, and that helps maintain strong trade ties. Hong Kong, which imports tree nuts, beef, poultry, pork, fruit and pet food, is the seventh largest ag export market by value for the U.S.  

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U.S. trade officials are scrambling to determine what – if any – impact there will be from Trump’s announcement on trade with Hong Kong. One line of speculation is that if the U.S. decided to raise tariffs on imports from Hong Kong in order to treat it the same as it does China, then China will push Hong Kong to raise tariffs on U.S. goods.

The U.S. exported about $3 billion worth of agricultural commodities to Hong Kong last year, down from $4 billion in 2018 and $4.2 billion in 2017, according to USDA data.

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