Impact of US Tariff War on Hong Kong’s Business and Economy
Uncertainties surrounding a potential resurgence of the US tariff war are expected to cast a shadow over Hong Kong’s business expansion plans and could negatively impact its economic growth for the remainder of the year. Frederick Ma Si-hang, chairman of the Trade Development Council, highlighted these concerns in an exclusive interview. However, he also expressed cautious optimism that a trade deal between the United States and China might be reached by the end of the year.
Ma pointed out that Washington is increasingly aware of the adverse effects that heavy tariffs on Beijing could have on its own economy, particularly in terms of inflation. This awareness may serve as a driving force for negotiations. Last week, US President Donald Trump announced fresh tariffs on more than 60 countries, signaling a shift toward a new era of protectionism. Additionally, the suspension of the “de minimis” rule, which allowed small packages under US$800 to enter duty-free, is expected to disrupt the global e-commerce sector.
The Challenge of Uncertainty in Business
Ma emphasized that the unpredictability of President Trump’s policies has made it extremely challenging for businesses to plan effectively. “The only certainty … is uncertainty with President Trump these days and that makes business very difficult because in business we want to have certainty. Otherwise, why would you invest? Why would you expand your business?” he said.
According to Ma, many businesses around the world are currently on a “holding pattern,” hesitant to make significant decisions due to the current climate. This hesitation is seen as one of the biggest challenges affecting the global economy. “This phenomenon is going to hurt businesses,” he added.
Hong Kong’s economy grew by 3.1% in the second quarter of 2025 compared to the same period last year, partly driven by a rush of shipments ahead of potential new tariffs. However, Ma warned that a slowdown in exports and overall economic growth could be expected in the second half of the year.
Despite these challenges, Ma noted that Hong Kong’s situation is relatively better than most places, thanks to its free port status, the “one country, two systems” principle, and support from mainland China. He also mentioned that the city has been mentally prepared for such scenarios since Trump’s first term.
Optimism for a US-China Trade Deal
Ma, who was born and educated in Hong Kong and has extensive experience in banking and finance, expressed optimism about the ongoing trade negotiations between the US and China. Recent talks in Stockholm concluded with both sides agreeing to extend their “tariff truce” by another 90 days. Trump stated that a “fair” deal would eventually be reached, though details remain unclear.
Ma believes that the US recognizes China’s strength and cannot afford to impose harsh tariffs as it did with other countries like Canada. “If (Trump) slapped a very high tariff on China, it would affect his domestic economy as well because inflation may go higher, which means (the) interest rate has to rise, something that he doesn’t want to see,” he explained.
He is confident that a more sensible solution will emerge. “I’m sure he would wait (for) all this and come up with a more relatively sensible solution.”
Confidence in Hong Kong’s Financial Markets
Ma also expressed confidence in Hong Kong’s financial markets, stating that they are poised to perform well at least until next year. This optimism is supported by a strong pipeline of companies seeking to list in the city. However, he acknowledged that the longer-term outlook depends on global economic conditions.
Two months after taking the helm at the Trade Development Council, Ma emphasized the need for the organization to intensify its efforts to counter negative perceptions abroad. He recounted recent trips to London and Paris, where business leaders indicated that they had not seen enough representatives from Hong Kong since the pandemic.
“We can’t just sit here and expect people to sing praises about Hong Kong,” he said. “I totally agree (the council) would step up in this area over time, at least during my tenure as chairman, because I really believe in communication.”
Addressing National Security Concerns
Regarding concerns over the national security situation in Hong Kong, Ma stressed the importance of clarifying misconceptions surrounding the Beijing-imposed national security law, which has been in effect for five years. He emphasized that the law is essential for restoring security in the region.
“Many people (have) got this wrong perception about Hong Kong: ‘Oh, you are becoming a police state. What’s going on?’ We need to tell the story,” he said.
