When the US government announced a comprehensive 10% tariff on Chinese exports to the US, and for the first time included Hong Kong in the scope of taxation, global financial markets immediately rippled. This policy not only touched the sensitive nerve of US-China relations but also directly impacted Hong Kong’s core function as an international trade hub. For investors in the forex and commodities markets, understanding the underlying logic of this trade conflict will be the key to grasping the patterns of market volatility in 2025.
Following the implementation of the latest tariff policy, the weighted average tariff rate on Hong Kong exports to the US will surge from 1.4% to 11.4% (refer the United States International Trade Commission USITC tariff database for details). This means an additional cost of USD 114 million for every USD 1 billion in trade volume. This move has already triggered a chain reaction—according to data from the Hong Kong Trade Development Council, over 60% of re-export trading firms are reassessing their supply chain arrangements, with some manufacturers beginning to shift production bases to Southeast Asia.
Tariff Impact Comparison Table:
| Indicator | Before Policy Implementation | After Policy Implementation | Change Range |
| Total Value of Hong Kong Exports to US | USD 4.1 billion | Estimated USD 3.7 billion | -9.8% |
| Average Tariff Cost Rate | 1.4% | 11.4% | +714% |
| Cross-border E-commerce Logistics Cost | 12-15% | 18-22% | +50% |
| HKD Exchange Rate Fluctuation Range | ±0.3% | ±0.8% | +167% |
supply chain restructuring is driving up demand for Southeast Asian currencies, with forward contract trading volume for the New Taiwan dollar and Vietnamese dong increasing by 23% year-on-year; second, the total balance of the Hong Kong banking system has declined for three consecutive weeks, reflecting tightening capital liquidity, which may widen the interest rate spread between the Hong Kong dollar and the US dollar.
Although the short-term impact of tariff policies is evident, Hong Kong’s unique institutional advantages are giving rise to new market opportunities. We have identified three major transformation trends:
As companies require more sophisticated currency hedging solutions, Hong Kong’s forex derivatives market saw a 17% increase in open interest within two weeks of the policy announcement, with RMB option trading rising to 38% of the total. This presents two key opportunities for investors:
ASEAN countries’ reliance on Hong Kong for re-export trade is increasing at a rate of 2.3% per month, particularly in sectors such as electronic components and medical equipment. This is driving a noticeable divergence in related shipping indices (such as the Hong Kong Container Throughput Index) and logistics real estate REITs. Companies with warehouse networks in Southeast Asia are now trading at a valuation premium of 15–20%.
In response to rising physical trade costs, the Hong Kong Monetary Authority has recently accelerated testing of its cross-border digital currency settlement system, with 12 multinational banks already participating in the mBridge project. This transformation may reshape the liquidity structure of the forex market, and the spot rate correlation between offshore RMB (CNH) and USD/HKD warrants close attention.
As the US-China trade war continues to escalate, tariff policies have evolved from simple trade barriers into key variables influencing capital market pricing. Using a tiered analysis framework, we aim to show investors how to construct a three-layered defense: managing volatility, capturing trends, and seizing structural transformation amid policy uncertainty.
According to Bloomberg historical backtesting, during the peak of the trade war from 2018 to 2020, a portfolio combining gold and Swiss francs was able to hedge 67% of policy-driven currency volatility risks. A dynamic allocation strategy is recommended:
Hedge Asset Performance Comparison Table (Annualized Returns)
| Asset Class | Trade War Period (2018–2020) | Policy Calm Period (2021–2023) | Volatility Difference |
| Gold | +9.2% | +3.1% | 18.7 vs 12.4 |
| Swiss Franc | +6.8% | -1.2% | 9.3 vs 6.8 |
| 10-Year US Treasury | +5.1% | -2.3% | 14.2 vs 8.9 |
Southeast Asia’s manufacturing sector is absorbing industrial shifts at an average annual rate of 7.3%, offering investors a two-phase entry approach:
Establishing a “Singapore dollar–Thai baht” currency hedge portfolio can reduce foreign exchange losses by 23% (according to Morgan Stanley’s 2023 emerging market model)
According to the Hong Kong Monetary Authority’s “2024 Fintech Blueprint,” digital payments and cold chain logistics will receive an average of HKD 1.2 billion in annual policy subsidies. It is recommended to focus on two types of targets:
| Indicator | High-Potential Benchmark | Risk Alert Threshold |
| Southeast Asia Warehouse Share | ≥35% | ≤15% |
| Cross-Border Bonded Warehouse Utilization Rate | ≥80% | ≤50% |
| Digital Temperature Control System Penetration Rate | ≥60% | ≤30% |
The essence of the US-China trade war is a rebalancing of global economic leadership. For sharp-eyed investors, tariff policies are not merely threats of rising costs, but catalysts driving market repricing. It is recommended to closely monitor three key signals: the interest rate spread between Hong Kong Interbank Offered Rate (HIBOR) and US LIBOR, transaction volume trends in the Cross-Border Interbank Payment System (CIPS), and throughput data from major ASEAN ports. Only by translating trade policy into concrete market variables can structural opportunities be captured amid volatility.
The US has imposed four rounds of tariffs on Chinese goods under “Section 301”. The current tariff structure (for real-time rates, it is recommended to consult the Global Trade Alert database) is as follows:
| Tariff Round | Effective Date | Covered Goods Value | Average Tariff Rate | Key Affected Industries |
| First Round | July 2018 | USD 34 billion | 25% | Industrial machinery, semiconductors |
| Second Round | August 2018 | USD 16 billion | 25% | Chemicals, electronic components |
| Third Round | September 2018 | USD 200 billion | 10%-25% | Furniture, textiles |
| Forth Round | September 2019 | USD 120 billion | 7.5%-15% | Consumer electronics, toys |
In addition, certain goods may apply for the “exemption list”. As of June 2024, the Office of the United States Trade Representative (USTR) has approved temporary exemptions for 352 products, including medical devices and bicycle components.
The tariff list covers multiple key industries, primarily categorized as follows:
1.Technology and Industrial Products
2.Consumer Goods and Daily Necessities
3.Raw Materials and Semi-Finished Products
Data Impact: Goods affected by tariffs account for 66% of total US-China trade volume according to a detailed (report by the US-China Business Council). US imports from China dropped from USD 539.5 billion in 2018 to USD 427 billion in 2023.
The US-China trade war has not officially ended from a legal standpoint, but the nature of the conflict has shifted toward technology controls and supply chain restructuring (for the latest data on industrial relocation, see the World Bank’s annual report on “Global Value Chain Restructuring”).
Supply Chain Adjustment: Vietnam’s exports to the US rose by 217% (2018–2023). Mexico has replaced China as the US’s largest trading partner. China is accelerating its “domestic circulation” strategy, with its export share to ASEAN rising to 15.8% in 2023.
Future Scenarios:If tariffs escalate, Trump has proposed a unified 60% tariff, which could result in a global GDP loss of 0.8%–1.2%. On the other hand, if partial easing occurs, key sectors such as semiconductors may be granted tariff exemptions, potentially reducing US consumer goods prices by 12%–18%.
