Both President Donald Trump and Chinese leader Xi Jinping have some tough decisions to make regarding Hong Kong and the ongoing trade war.
For one, both houses of Congress have passed the Hong Kong Human Rights and Democracy Act of 2019. The bill is now headed to Trump’s desk for his signature.
Will he sign it?
Standing with Hong Kong
Trump has very publicly–and correctly—voiced his support of the protesters, saying, “I stand with Hong Kong. I stand with freedom.” And just as importantly, he has linked the outcome of U.S. trade negotiations to China’s treatment of the Hong Kong protesters.
But in the same breath, he also said, “But we are also in the process of making the largest trade deal in history. And if we could do that, that would be great.”
Trump’s statement would seem to cast doubt on him supporting Congress’ so-called “Hong Kong bill.”
Has Trump put himself between a rock and a hard place?
If the Hong Kong bill becomes law, it will require the United States to impose sanctions against China and Hong Kong for human rights abuses. It will also force an annual review by the U.S. State Department and others to determine if Hong Kong’s political status under China merits renewing Hong Kong’s special trade status for the coming year. In other words, it has teeth.
Not surprisingly, China was angered over the passage of the bill, claiming that it “seriously violated international law and basic norms governing international relations. China condemns and firmly opposes it.”
But will Trump sign the bill? Should he?
It works to Trump’s advantage if he does not sign the bill. Since it is veto-proof, the bill could become law whether he signs it or not. That let’s Trump off the hook and yet still codifies U.S. sanctions against China and the annual review of Hong Kong’s special status.
Beijing won’t like it, but Trump can just shrug his shoulders and say, “that’s the way our American republic works.”
What Are China’s Options?
What will China do if the bill becomes law?
They could certainly decide to pull out of the trade negotiations. They could also send in the military to put an end to the politically embarrassing protests in Hong Kong, or both. The United States could not stop China from doing either of those things.
But China has its own balancing act to perform. It’s clear, for example, that the CCP leadership is keenly aware of the high costs of cracking down on Hong Kong. That’s precisely why the military has largely remained in its barracks.
It’s also evident that China’s economy is the worst in 30 years, and with it the CCP’s political legitimacy. And with a potential real estate meltdown on the horizon, Beijing needs all the relief it can get.
The fact is that China needs a deal more than the United States does