By Daphne Psaledakis and Jeff Mason
WASHINGTON (Reuters) – President Donald Trump’s economic adviser said on Tuesday China was making “a big mistake” with planned national security legislation on Hong Kong and pledged Washington would pay expenses of U.S. firms that wanted to shift operations from the territory or China.
At the White House, spokeswoman Kayleigh McEnany told a briefing Trump was displeased with Beijing over the security law and finds it hard to see “how Hong Kong can remain a financial hub if China takes over.”
Trump economic adviser Larry Kudlow, speaking to Fox News Channel, called Beijing’s actions toward Hong Kong “very disturbing.”
“China is making a big mistake, frankly,” he told Fox Business Network separately.
Kudlow said the United States would welcome back any American companies in Hong Kong or on China’s mainland. “We will do what we can for full expensing and pay the cost of moving if they return their supply chains and their production to the United States,” he said.
Beijing’s proposed security law would reduce the territory’s separate legal status. China’s parliament is expected to approve it by Thursday.
U.S. Secretary of State Mike Pompeo, who is due to release a congressionally mandated assessment on whether Hong Kong enjoys sufficient autonomy to justify continued U.S. special economic treatment, said last week the legislation would be the “death knell” for its autonomy.
Trump has warned of a strong reaction and national security adviser Robert O’Brien said the legislation could lead to U.S. sanctions and threaten Hong Kong’s status as a financial hub.
Kudlow also said that while Trump’s “Phase 1” trade deal with China reached in January was intact for now, the president was so “miffed” with Beijing over the novel coronavirus and other matters it was not as important to him as it once was.
The U.S. Chamber of Commerce lobbying group urged Beijing to de-escalate the situation, saying it would be “a serious mistake” to jeopardize Hong Kong’s special status.
(Reporting by Tim Ahmann, Lisa Lambert, Daphne Psaledakis and David Brunnstrom; additional reporting by Andrea Shalal; writing by David Brunnstrom; editing by Jonathan Oatis)
