The proposal faces strong opposition from others in the administration who worry such a move would only hurt Hong Kong banks and the US, not China, they said. Another person cautioned that the idea of attacking the dollar peg is lower on the list of possible options now under discussion. Those ideas include cancelling a US-Hong Kong extradition treaty and ending cooperation with Hong Kong’s police, the person said.
(July 8): Some top advisers to President Donald Trump want the US to undermine the Hong Kong dollar’s peg to the US dollar as the administration considers options to punish China for recent moves to chip away at the former British colony’s political freedoms, according to people familiar with the matter.
The idea of striking against the Hong Kong dollar peg – perhaps by limiting the ability of Hong Kong banks to buy US dollars – has been raised as part of broader discussions among advisers to Secretary of State Michael Pompeo and hasn’t been elevated to the senior levels of the White House, suggesting that it hasn’t gained serious traction yet, according to people who discussed the matter on condition of anonymity.
