Politics

Hong Kong rights bill unlikely to derail US-China trade talks, strategy firm principal says

Key Points
  • U.S. Congress passed the "Hong Kong Human Rights and Democracy Act" which Beijing "strongly" condemns.
  • The bill, which aims to protect human rights in Hong Kong, will not be enough to disrupt US-China trade talks, according to Amy Celico, principal at Albright Stonebridge Group.
  • "I think calling off the trade talks over this legislation isn't good for China," she says.
Flags of the US and China are placed ahead of a meeting between US Secretary of Agriculture Sonny Perdue and China's Agriculture Minister Han Changfu at the Ministry of Agriculture in Beijing on June 30, 2017.
Jason Lee | AFP | Getty Images

A U.S. bill aiming to protect human rights in Hong Kong is unlikely to disrupt trade talks between Washington and Beijing, said Amy Celico, principal at Albright Stonebridge Group.

While Celico said it was a "significant issue" for China she did not expect the passing of that bill to steer U.S.-China talks off course.

"I don't think it's enough of an issue to derail the trade talks," she told CNBC's Sri Jegarajah at the Morgan Stanley APAC Summit.

The "Hong Kong Human Rights and Democracy Act" cleared both chambers of Congress this week as Hong Kong remains engulfed in mass protests. The measure needs to be signed by President Donald Trump before it becomes law.

The bill would require the U.S. State Department to annually certify that Hong Kong has enough autonomy to warrant its continued special status. Under that distinction, Hong Kong receives unique treatment that spares the Asian financial center from tariffs that have been slapped on China in the ongoing trade war with the U.S.

The legislation would also look to impose sanctions on those responsible for human rights violations in Hong Kong.

Asked about the bill at a press conference this week, China's foreign ministry spokesperson Geng Shuang said "China strongly condemns and firmly opposes it."

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Hong Kong bill passes the House

Celico said that China has "tried consistently" to be restrained in its response to a slew of U.S. actions.

"And so proportionate in their response, I think calling off the trade talks over this legislation isn't good for China," she said.

Hong Kong, a semi-autonomous region, has seen months of violent clashes between anti-government protesters and police. The protests were first aimed at fighting an extradition bill, which has since been scrapped.

Skirmishes between the government and protesters have often escalated. In recent weeks, protesters fired arrows and torched an armored vehicle amid a police barrage of tear gas.

A second U.S. bill to bar the export of certain munitions to Hong Kong police was also passed by both chambers of Congress.

US-China trade talks

The U.S. and China have been locked in a trade battle for more than a year, placing tariffs on one another's imports worth billions of dollars. Hopes they will agree on a "phase one" deal come as a deadline for the next round of duties is fast approaching. The U.S. is due to impose another round of 15% tariffs on Dec. 15.

When asked whether these tariffs would be implemented, Celico said, "If there is a phase one deal of course they are off.

"The problem is if we can't get to that deal," she said.

But she also said the Trump administration still has "a little bit of wiggle room."

"They could put off implementation of those tariffs beyond Dec. 15 and say because the negotiations continue to go well — both sides continue to say they are actively negotiating in a constructive way — they may say we just need more time."