Hong Kong Could Be a Loser From the Trade Deal
That’s difficult, but not impossible. China’s imports of chicken, pork and beef have already been unusually low in recent years due to trade disputes that mostly predated the Trump administration, as we’ve written. Remove barriers to agricultural purchases and Chinese imports from the U.S. could be $35 billion to $53 billion larger, according to a 2018 study by academics at Iowa State University, more than halfway toward the $100 billion-a-year target.
It may take a while to ramp farm production up to those levels — on the flip side, however, meat prices this year are likely to be higher than the researchers expected, thanks to the protein gap that’s emerged in China as a result of African Swine Fever. Other sums could be added on top: Returning soybean purchases to pre-trade war levels alone would add $10 billion; ensure the U.S. gets 10% of China’s purchases of crude oil and liquefied natural gas, and you could easily get above $80 billion.
After that things get harder. Planes and automobiles might help, but the parlous state of China’s car market and America’s aerospace champion puts question marks over both.
That’s where Hong Kong comes in. America’s largest trade surplus with any economy is with the port city, largely thanks to its role as an entrepot. About $10 billion of Hong Kong’s imports from the U.S. are only pausing in the city en route to the mainland, and are Chinese imports in all but name. Beijing has considered re-routing that trade through mainland ports to plug the gap in the target, people familiar with the matter told Bloomberg News last month.
Things have already been heading in this direction for several years. In the mid-2000s, Hong Kong still vied with Singapore for the title of the world’s busiest
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