By Jessie Pang
Hong Kong (Reuters) – Hong Kong’s government said on Monday that it would bolster support for small and medium sized companies to help weather the storm from U.S. President Donald Trump’s sweeping tariff plans which are set to deepen the pain for local exporting companies.
Hong Kong, as an international trade hub, will be affected by U.S. tariffs in the short term but remains an open economy and welcomes investments, Financial Secretary Paul Chan told a press conference, adding that being a “free port” remained the core advantage of the city.
Chan said the imposition of reciprocal tariffs was “a bullying and unjustified act that violates WTO rules” and undermined recovery of the global economy.
He said the government would keep strengthening the provision of export credit insurance support for enterprises engaging in trade through the Export Credit Insurance Corporation (ECIC).
The Hong Kong Monetary Authority, the city’s de facto central bank, will continue to coordinate with banks to help SMEs cope with their liquidity needs, he added.
The government would also support Hong Kong enterprises to upgrade their branding, expand into new markets such as Southeast Asia and the Middle East, and accelerate their digital transformation, Chan said.
The Hong Kong dollar exchange rate had remained very strong, he added.
Chan was speaking after Hong Kong stocks experienced their biggest drop since 1997 on Monday after Beijing fired back at U.S. tariffs with its own trade levies, deepening market turmoil amid fears of a widening trade war, while China’s sovereign wealth fund intervened to stabilise local shares.
Julia Leung, CEO of Hong Kong’s Securities and Futures Commission, said at the same briefing that no abnormal situation was found in the market, adding that brokerage firms surveyed by the Hong Kong bourse responded that client margin deposits were paid in time.
“Turnover remained robust,” she said, showing that the Hong Kong market is resilient and able to withstand external fluctuations.
(Reporting by Jessie Pang, additional reporting by Summer Zhen; Editing by Toby Chopra, Hugh Lawson and Bernadette Baum)
