President Donald Trump on Friday again pushed to place more sanctions on China by declaring that Hong Kong is no longer autonomous, and the United States will eliminate special trade and policy benefits that have been granted to the territory over time.
The president laid out several punitive measures against China on Friday, including revoking visas for Chinese students in certain studies and establishing a working group to examine the financial practices of Chinese companies listed on U.S. financial markets.
In brief remarks that lasted fewer than 10 minutes, the president did not make any mention about withdrawing or revoking the Phase One Economic and Trade Agreement between the U.S. and China signed by President Trump and Chinese officials just 135 days ago.
In his anger over the COVID-19 pandemic that has infected 1.7 million Americans and taken the lives of more than 102,000 people in the country, Trump also said he was pulling $450 million in annual funds away from the World Health Organization.
The president claims Chinese officials have “total control” over the United Nations organization. Trump said China “pressured the World Health Organization to mislead the world” about the coronavirus and due to that, “Countless lives have been taken and profound economic hardship has been inflicted around the globe.”
In moving to revoke special status for the semi-autonomous territory of Hong Kong, the president said China’s moves this week with an enforcement law in the region “unilaterally imposed control over Hong Kong security.”
The president’s stance comes after China’s legislature had unanimously approved broad new powers to quell protests and speech in Hong Kong. With that, Trump said he was directing his administration to revoke special treatment granted to the region on issues such as trade.
“My announcement today will affect the full range of agreements we have with Hong Kong from our extradition treaty to our export controls on dual-use technologies,” Trump said.
Hong Kong imported about $30.8 billion in U.S. goods in 2019, down from about $37.3 billion in 2018. Agricultural exports in 2018 accounted for about $4 billion, including $966 million in beef, and $1.1 billion in tree nuts. Poultry, pork and fresh fruit products were also large exports to Hong Kong.
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On Jan. 15, before the first U.S. coronavirus case was known, Trump and China’s vice premier signed the phase-one trade deal meant to drive higher U.S. exports to China, including phasing up agricultural exports to as much as $50 billion a year. Trump at that time said the deal was good for both countries “and hopefully it can lead to a more stable world and peace.”
The moves come just a week after White House officials had said they met recently with Chinese officials on the phase-one deal and were confident China would comply with the agreement.
Friday’s actions will now leave markets and U.S. officials to watch China’s response to another round of actions from the U.S.
While soybean and pork exports are up from a year ago, China so far has not kept pace with the phase-one agreement to buy $36.6 billion in U.S. agricultural goods this year.
The president on Friday returned to some of the rhetoric used in the trade war that led up to the signing of the phase-one deal. Citing theft of intellectual property, the president said he would issue a proclamation that would suspend the entry of “certain foreign nationals from China” to protect university research.
The president added that U.S. investors should not be subject to “hidden and undue risks” in Chinese companies and will put together a working group to demand more transparency for Chinese companies trading on U.S. stock exchanges.
Commodity markets on Friday were expecting U.S. actions against China. That brought down November soybean 4 1/4 cents, to $8.51 a bushel, and July soybeans also fell 6 1/4 cents to $8.40 a bushel. December corn was down 1 1/2 cents to $3.38 a bushel. Live cattle and hogs fell on Friday as well.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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