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US ends pacts with Hong Kong on extradition, shipping tax

Bloomberg August 20 | Updated on August 20, 2020

Moves part of Trump administration efforts to pressure China over imposition of national security law

The US suspended its extradition treaty with Hong Kong and ended reciprocal tax treatment on shipping with the former British colony, the latest salvo in escalating tensions between Washington and Beijing.

The moves are part of the Trump administration’s efforts to pressure China over the imposition of a national security law that has led to charges against pro-democracy activists. They follow up on an executive order to end preferential trading treatment for the city, which President Donald Trump and his team say is now essentially just another Chinese city.

The benchmark Hang Seng Index fell on Thursday for a second day as investors remained worried about tensions between the world’s biggest economies. Hong Kong’s government didn’t immediately respond to a request for comment.

The US move follows a half-dozen other countries — including Australia, Germany and the UK — that have suspended extradition agreements with Hong Kong following China’s imposition of the law in late June. The Trump administration also sanctioned 11 senior officials who oversee Hong Kong, including the city’s leader Carrie Lam, who has said she’s had difficulties with credit cards. China responded with retaliatory measures against US senators and human rights activists, though avoiding senior White House officials.

Blame game

More broadly, the Trump administration has engaged in a seemingly endless clash with Beijing over everything from apps such as TikTok and 5G wireless technology to a blame game over Covid-19 and arms sales to Taiwan. Tensions and rhetoric have escalated recently as the global pandemic worsened in the US, China ramped up pressure on Hong Kong and as the US election draws closer.

The agreements terminated on Wednesday covered the surrender of fugitive offenders, the transfer of sentenced persons, and reciprocal tax exemptions on income derived from the international operation of ships, State Department spokeswoman Morgan Ortagus said.

These steps underscore our deep concern regarding Beijing’s decision to impose the National Security Law, which has crushed the freedoms of the people of Hong Kong, Ortagus added.

Published on August 20, 2020

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