Hong Kong’s export value is expected to decline by four per cent this year. Asean has surpassed the US as Hong Kong’s second largest export market. In the first seven months of 2019, Hong Kong’s exports to Asean markets climbed 4.6 per cent. The US has imposed tariffs on almost all goods imported from the mainland. Inevitably, this has had an impact on Hong Kong’s exports to the US. In the first seven months of 2019, Hong Kong’s exports to the US fell 10.9 per cent.

Hong Kong’s exporters have been negatively affected by the current trade friction, with shrinking order sizes, price bargaining and cancelled orders the most common consequences. They have had to share additional tariff costs with buyers. Reduction or cancellation of orders and price reductions is more serious than before. So Hong Kong companies have relocated their production or sourcing bases to Vietnam, Cambodia and India. This will impact Hong Kong companies that provide trade-related services.

Hong Kong traders have adopted different strategies to cope with these business challenges. In addition to developing in non-US markets like Latin America and the Middle East, manufacturers have lowered unit prices, moved production/sourcing bases, downsized the company and lowered the minimum order quantity.