US Lets Hong Kong Emergency Expire, But Trade Restrictions Remain

The United States has allowed a national emergency declaration related to Hong Kong to expire, lifting some sanctions on Chinese and Hong Kong officials, but the underlying executive order that revoked the city’s preferential trade status remains in effect — creating a nuanced diplomatic outcome with divergent interpretations from Washington and Beijing.

A Limited but Significant Move

The national emergency declared under Executive Order 13936, signed by President Donald Trump in July 2020 in response to China’s imposition of a national security law on Hong Kong, expired on July 14, 2026, after the Trump administration chose not to renew it. According to Associated Press, the expiration led to the delisting of nine individuals who had been sanctioned solely under the national emergency authority.

China’s Ministry of Commerce welcomed the move, calling it “an important step in fulfilling the consensus reached during bilateral economic and trade talks.” A ministry spokesperson stated on July 17 that the US had confirmed the national emergency would not be extended, and expressed appreciation for the decision.

However, a State Department spokesperson clarified that “the president has allowed the national emergency to end, but Executive Order 13936 otherwise remains in effect,” meaning Hong Kong is still not treated as sufficiently autonomous for preferential treatment under US law.

What Actually Changed

The practical impact of the expiration is more limited than China’s welcoming statement might suggest. The US Treasury Department’s Office of Foreign Assets Control (OFAC) explained that the non-renewal was “consistent with sanctions modernization efforts that streamline sanctions for greater efficiency and effectiveness, including by ensuring our sanctions are not duplicative.”

According to Xinhua News, the Chinese Commerce Ministry framed the development as a fulfillment of commitments made during US-China trade talks in Madrid (September 2025) and Kuala Lumpur (October 2025), where the US made pledges on Hong Kong and investment issues.

In practice:

• Lifted: Sanctions on nine individuals imposed solely under the national emergency authority
• Remaining: Executive Order 13936 stays in effect; Hong Kong’s special trade status is not restored; sanctions under the Hong Kong Autonomy Act continue for 39 of 48 individuals; “Made in China” labeling for Hong Kong goods continues

Broader Diplomatic Context

The decision comes amid a period of warming US-China relations. Trump met President Xi Jinping in Beijing in May 2026, and Xi is expected to visit the US later this year. The Hong Kong SAR government issued a statement noting the “positive shift in US policy” and expressing hope that Washington would “respect China’s sovereignty and Hong Kong’s rule of law, and resume normal economic and trade exchanges with the SAR,” as reported by Hong Kong’s Government News.

The expiration of the national emergency — which had been extended annually by Presidents Biden and Trump since 2020 — could be seen as a goodwill gesture. However, the US Treasury’s framing of the move as a technical streamlining exercise suggests caution about reading too much into the decision.

The Divergent Interpretations

A significant gap exists between how China and the US have presented this event. Beijing’s Ministry of Commerce portrayed the expiration as a fulfillment of US commitments from the Madrid talks, implying a positive trajectory toward restoring Hong Kong’s special status. The US State Department and Treasury, by contrast, emphasized that only the procedural national emergency declaration lapsed, while the substantive order remains fully in force.

As noted by Wikipedia, Executive Order 13936 was signed on July 14, 2020, and directed US government agencies to eliminate preferential treatments given to Hong Kong compared to mainland China, including export controls, sanctions, and trade labeling requirements.

What to Watch For

With Xi Jinping’s expected visit to the US later in 2026, questions remain about whether further changes to Hong Kong policy could follow. For now, Hong Kong continues to be treated as mainland China for trade purposes — a status that affects its competitiveness as a global financial and trading hub. The coming months will reveal whether this was a one-time technical adjustment or a precursor to broader policy changes in US-China relations.