US–China trade tension hits Hong Kong

The ongoing dispute between the US and China is having an impact on Hong Kong’s air imports and exports, according to the latest DHL Hong Kong Air Trade Leading Index.

The quarterly report, commissioned by DHL Express (Hong Kong), is prepared by the Hong Kong Productivity Council. It surveys over 600 Hong Kong companies involved in inbound or outbound trading via air.

The current survey took place before the G20 summit in Osaka, and after the US introduced 25% tariffs on US$200bn worth of Mainland Chinese goods. Against this backdrop, the report describes the overall air trade outlook for the third quarter of 2019 as “muted”.

It sums up: “The market is taking a cautious, conservative approach as traders wait for the outcome of negotiations between the US and China.”

Of the 36% of respondents who believe extra tariffs will affect their business, just over half (51%) said the cost would be shared between sellers and buyers while almost all the rest (46%) said buyers would bear the entire burden.

Demand is slackening across all markets and both imports and exports have slowed, although import demand from other Asia-Pacific countries, such as Japan, is more resilient.

The biggest dip occurred in the watches, clocks and jewellery segment. On the other hand, respondents “remain optimistic” about prospects for the gifts, toys and houseware segment. Exports of electronic products and parts dropped slightly, owing to softening demand in the Americas and Asia Pacific.

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