Top advisers to President Donald Trump have ruled out undermining the Hong Kong dollar’s peg to the greenback as they seek to punish China for infringing on the territory’s political freedoms, according to people familiar with the matter.
Aides at the White House and State department had weighed the possibility of limiting Hong Kong banks’ access to U.S. dollars as a way of striking back at Beijing, Bloomberg News reported last week. But they dropped the idea after advocates could not gather enough support, with those against the move concerned that it would be difficult to implement and could end up hurting the U.S., according to one of the people.
Tensions between the U.S. and China have flared over issues ranging from the competition for military supremacy in the South China Sea to the handling of the coronavirus pandemic.
Early Monday, Beijing announced sanctions against U.S. Senators Marco Rubio and Ted Cruz -- a largely symbolic move after the U.S. sanctioned a top member of China’s ruling Communist Party and three other officials over alleged human rights abuses in Xinjiang.
Beijing has repeatedly accused Washington of inappropriately interfering in China’s internal affairs.
“The president is not in a good mood about China,” White House economic adviser Larry Kudlow said Monday in a Fox News interview.
Hours later, the Trump administration rejected China’s territorial claims in the South China Sea, reversing a previous policy of not taking sides in regional disputes.
The White House referred questions to the National Security Council which did not immediately respond to a request for comment.
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