Hong Kong’s Financial Secretary Paul Chan predicted sustained high interest rates Sunday, directly linking the economic impact to recent U.S. tariffs on China, Canada, and Mexico.
In a candid radio interview, Chan suggested the additional trade barriers imposed by U.S. President Donald Trump would create a ripple effect beyond American borders, with particular implications for Hong Kong’s financial landscape.
“When U.S. interest rates are high, rates in Hong Kong will correspondingly rise,” Chan said, highlighting the city’s dollar-pegged economic system. The mechanism means Hong Kong’s monetary policy is intrinsically tied to U.S. economic fluctuations.
The executive order, which introduced a 10% tariff on Chinese imports and 25% rates for Canada and Mexico, is expected to generate inflationary pressures that could burden businesses and constrain asset markets.
Chan was notably critical of the potential consumer impact, arguing that additional tariff costs would ultimately be passed onto American consumers. He characterized Trump’s governance approach as “rather extreme,” indicating the Hong Kong government has proactively developed contingency plans to mitigate potential economic disruptions.
The financial secretary’s remarks underscore the complex interdependencies of global trade and monetary policy in an increasingly volatile economic environment.