How Trump Could Quickly Raise the Stakes in Hong Kong

Pro-democracy protesters have flooded the streets of Hong Kong for weeks and even forced the airport to close, but U.S. President Donald Trump has largely avoided getting involved. That doesn’t mean he has no leverage. Under a U.S. law, Trump has the power to rescind Hong Kong’s status as a preferential trading partner -- essentially turning the Asian financial hub into just another Chinese city. Such a seismic shift would be an almost unthinkable escalation of the U.S.-China trade war, but some lawmakers in Washington have been making supportive noises.

When Britain handed Hong Kong back to China in 1997, the Chinese government pledged that the city would have a “high degree of autonomy” in its legal and economic affairs for 50 years, under an arrangement known as “one country, two systems.” On those terms, the U.S. agreed to treat Hong Kong differently than the People’s Republic of China for trade purposes under the United States-Hong Kong Policy Act of 1992. But the president can issue an executive order suspending that special treatment if the territory is deemed to no longer be “sufficiently autonomous.”