Hong Kong turmoil could cast a ‘shadow’ over China-US trade talks - experts

As Beijing and Washington return to the negotiating table looking to settle their trade dispute, experts say the Hong Kong protests could cast a “shadow” over discussions — even if the situation doesn’t directly affect the outcome of this week’s talks.

“If anything happened bad, I think that would be a very bad thing for the negotiation. I think politically it would be very tough,” U.S. President Donald Trump said of Hong Kong’s pro-democracy protests.

Hong Kong, a former British colony, returned to Chinese rule in 1997. Anti-government protests have rocked the city for over four months now. They first erupted over a now withdrawn extradition bill that would have allowed fugitives to be transferred to mainland China for trial.

“It will just irritate the Chinese that the two [situations] are being linked,” said Richard Harris, CEO of Hong Kong-based asset management firm Port Shelter Investment Management.

But if Beijing exercises any extreme measures in Hong Kong, then there will be potential talks of sanctions and restrictions, denting any progress that has been made, Harris told.

“There’s been strong reports, even this morning, that if there is major action by Chinese forces in Hong Kong, that it will certainly be included in terms of the trade deal — and you have to think that’s going to be the case,” he said.

Even if there’s no direct impact, Hong Kong’s months of unrest “will likely cast an uncomfortable shadow over the [trade] discussions,” said Nick Marro, global trade lead at The Economist Intelligence Unit.