The city’s Commerce and Economic Development Bureau (CEDB) announced on Thursday three measures to secure the cash flows of the city’s SMEs and to assist them in exploring emerging markets, such as countries in Southeast Asia.
The move comes after US President Donald Trump on Wednesday abruptly paused his tariffs on most of his country’s trading partners but doubled down on imposing duties on China, which slapped its own retaliatory levies against the US and vowed to “fight to the end.”
Hong Kong – a former British colony that returned to Beijing’s rule in 1997 – is expected to face the same level of US tariffs as China.
Algernon Yau, secretary for commerce and economic development, said in a statement that Washington’s “mercurial” tariff policies had “completely gone against logic and the facts,” calling them a “barbaric act to suppress its opponents.”
“I call on the industries to stay united and respond to the United States’ unreasonable threats together,” he said.
The measures include extending free pre-shipment cover under Hong Kong’s Small Business Policy to the end of June next year. The policy provides insurance for city exporters earning less than HK$50 million of income in a year, covering risks associated with international trade, like buyers cancelling a contract before the shipment of goods.
Businesses that are not eligible for the Small Business Policy will enjoy a 50 per cent discount for purchasing the pre-shipment cover, according to the statement on Thursday.
The premium for getting insured while doing business in emerging markets will also be lowered and standardised with that of the established markets, the CEDB said.
The move comes after Yau met with industry representatives and major local commerce chambers following Trump’s announcement of “reciprocal” tariffs on US trading partners last week.
‘Impossible to do business’
Separately, two industry leaders said on Thursday that US tariffs would make doing business in the United States “impossible.”
Speaking on an RTHK programme on Thursday morning, the Federation of Hong Kong Industries chairperson, Steve Chuang, said some US clients had already been requesting the city’s businesses to put shipping on hold, and in some cases, had the orders outright cancelled.
“The tariffs have reached a rate that it is impossible to do business,” Chuang said in Cantonese.
He added that Hong Kong businesses had to adopt a wait-and-see approach given the lack of clarity from the US, but cash flows could be strained as they had completed the products and were ready to ship.
He described the US as “very unreasonable,” adding that it was critical for the Hong Kong government to assist SMEs in maintaining cash flows.
Speaking during the same programme, Gary Lau, chairperson of the Hong Kong Association of Freight Forwarding and Logistics, said Trump’s levies on low-value small parcels would deal a significant blow to e-commerce businesses in the city.
The US president signed an executive order on Tuesday that tripled the planned tariff rates for shipments valued at US$800 or below from China and Hong Kong, with such packages subject to a duty of either 90 per cent of their value or US$75 per item, effective May 2. Starting June 1, the latter rate will increase to US$150 per item.
“This basically means no more business,” Lau told RTHK in Cantonese.
The city’s e-commerce operators have been rushing to ship their parcels to the US before the tariffs come into effect next month, he also said.
Both Chuang and Lau highlighted the need for Hong Kong exporters to diversify markets amid the uncertainty of Trump’s policy.
Chief Executive John Lee on Tuesday called the US’s tariffs “reckless” and said they would bring “great risks and uncertainties to the world.”
He vowed that Hong Kong would “fully seize” the opportunities in China and deepen regional ties, such as with countries in Southeast Asia and the Middle East.
Cash flow assistance, insurance benefits, brand development, and direct funding are among the supportive measures that Hong Kong provides to SMEs, Lee said.
Source: https://hongkongfp.com/2025/04/10/hong-kong-boosts-insurance-support-for-smes-to-tap-into-new-markets-amid-us-china-trade-war/