US restores preferential trade privileges for Hong Kong, drawing thanks from China

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HONG KONG (AP) — The United States confirmed Friday that it will not renew an executive order that revoked Hong Kong's special trading status. The decision comes after China signaled that the city's preferential privileges were being restored.

The U.S. order, which U.S. President Donald Trump signed in July 2020 in his first term in response to Beijing imposing a national security law to limit dissent in Hong Kong, is not being renewed, according to a Treasury Department spokesperson who was not authorized to speak publicly on the issue by name and spoke on condition of anonymity. Trump’s order was last renewed for a year in July 2025.

The spokesperson said sanctions under the Hong Kong Autonomy Act of 2020, which sanctions officials that promote China's policy of limiting Hong Kong's autonomy, will continue, adding that the nonrenewal is consistent with efforts to make sure sanctions are not duplicative.

China considers the national security law for Hong Kong necessary to restore stability in the city after massive anti-government protests in 2019. The pro-democracy movement back then posed one of the biggest challenges to the Communist Party in Beijing and the Hong Kong government since the former British colony returned to Chinese rule in 1997.

Under the order, Trump said Hong Kong was no longer sufficiently autonomous to justify differential treatment in relation to mainland China under certain laws. It eliminated the preferential treatment for Hong Kong to the extent permitted by law and in the national security, foreign policy, and economic interest of the United States.

The implications of the decision not to renew the order were not immediately clear. The White House referred questions about the executive order lapsing to the Treasury Department.

The U.S. Office of Foreign Assets Control said in a statement Friday that the national emergency declared in the executive order had expired and that it delisted people who were sanctioned under the order. But it said people who remain sanctioned under another act related to Hong Kong have been added to a different sanction list.

The statement showed Hong Kong leader John Lee and his predecessor, Carrie Lam, were removed from the first list but added to the second one.

The U.S. decision came two months after Trump met with his counterpart Xi Jinping in Beijing. It could warm ties between them ahead of Xi’s expected visit to the U.S. later this year. Earlier this month, a pastor of a prominent underground church who was detained in China in October was released after Trump brought up his case with Xi.

China’s Commerce Ministry said that the U.S. made commitments on Hong Kong issues and other matters during the U.S.-China trade talks in Madrid last year. The U.S. recently confirmed to China that the President’s Executive Order on Hong Kong Normalization would end, the ministry said in a statement responding to media questions.

“The U.S. side’s actions represent an important step in fulfilling the consensus reached during the bilateral economic and trade talks. China appreciates it,” it said.

Six years after the national security law's introduction, many leading activists, including pro-democracy former media tycoon Jimmy Lai, were imprisoned under it. Critics say the Western-style civil liberties that Beijing promised to maintain for 50 years after the handover have declined.

The Hong Kong government said in a statement that it noted the “positive shift in the U.S. policy” toward the city.

“Safeguarding Hong Kong’s prosperity and stability serves the common interests of China and the U.S. and also aligns with the general expectation of the international community,” it said.

It said it hopes the U.S. will respect China's sovereignty and the rule of law in Hong Kong and resume normal economic and trade exchanges with the city.

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Associated Press writer Joshua Boak in Washington contributed to this report.