The Trump administration on Monday announced it will block exports of military equipment to Hong Kong, and will soon require licenses to sell items that have both civil and military uses to the territory.
US State Secretary Mike Pompeo declared the measure as China stepped forward to enforce a new Hong Kong national security law that many worry Beijing and the Chinese Communist Party will use to tighten control of the former British territory.
The China-Britain Declaration pledged that Hong Kong would keep its democracy and democratic rights for at least 50 years after 1997 under what China called the "One Country, Two Systems" policy.
Pompeo said Washington will continue to evaluate trade and other privileges that Hong Kong had enjoyed, and will take further steps to reflect what is actually happening on the ground in the financial hub.
China promised autonomy for Hong Kong before the British government handed over the city in 1997 but wants no repeat of massive and sometimes violent demonstrations that jolted the territory last year.
The US carried out the decision moments after Beijing disclosed it would restrain visas to some Americans heading to Hong Kong, which in itself is a response to a US move. In a statement, Pompeo said they can no longer differentiate between the export of controlled equipment to Hong Kong or China.
However, the direct effect will be modest. In 2019, the State Department authorized $2.3 million in defense sales to Hong Kong, of which $1.4 million worth was actually shipped, including ammunition and firearms for use in law enforcement, official figures showed.
The US Department of Commerce is also halting regulations granting preferential treatment to Hong Kong over China, which includes the availability of export license exceptions, Secretary Wilbur Ross disclosed separately.
The US Senate approved a bill last week that would implement sanctions on people or companies that support efforts to restrict Hong Kong's autonomy. A Chinese foreign ministry spokesman told media that Beijing has lodged a complaint with Washington over the bill and warned that China will act with strong counter-measures in response to US actions on Hong Kong.
Meanwhile, data from the commerce department revealed the US delivered over $75 million worth of military hardware to Hong Kong in 2019. The exports included $64 million worth of turbines and engines for military use, $7.8 million of military components, and $3.5 million under an item categorized as "tanks, artillery, missiles, rockets, guns and ammunition," Doug Palmer of The Politico wrote.
Hong Kong shares settled lower Friday after US policymakers moved closer to applying sanctions to individuals and companies that they view as China's accomplices in clamping down on the city's autonomy, while new outbreaks from the coronavirus around the world also soured the sentiment.