Economy

Hong Kong’s Economy: How It Outmaneuvers US Tariffs and Secures Second Place in Asia

Hong Kong’s economy is resilient to US tariffs, second only to Singapore, due to diverse trade and strong reserves.

October 28, 2025, 12:41 PM

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Executive Summary

Hong Kong ranks as the second most resilient economy among five major Asian counterparts against potential global tariff shocks imposed by the United States, surpassed only by Singapore.

The POD Research Institute attributes Hong Kong’s strong economic performance to its diversified trade, robust foreign exchange reserves, and stringent financial regulations.

The study recommends Hong Kong accelerate institutional reforms and continue expanding its market and currency options to bolster future economic resilience.

The Story So Far

The POD Research Institute initiated its study in response to President Trump’s earlier remarks suggesting a collapse of China’s economy due to US tariffs, which included a 10 percent “baseline” tariff on all US imports announced in April. This research aimed to assess the economic resilience of major Asian economies against potential global tariff shocks stemming from these US trade policies, providing a direct context for its findings on Hong Kong’s performance.

Why This Matters

Hong Kong’s strong economic resilience against potential US tariff shocks, ranking second in Asia, challenges previous narratives about the severe impact of such policies on the region, particularly following President Trump’s earlier comments on China’s economy. However, to maintain and enhance this stability and competitive edge in a dynamic global landscape, the study underscores the ongoing need for Hong Kong to accelerate institutional reforms and further diversify its market and currency options.

Who Thinks What?

The POD Research Institute, led by Ronny Tong Ka-wah, found Hong Kong to be the second most resilient economy in Asia against potential US tariff shocks, attributing this strength to diversified trade, robust foreign exchange reserves, and stringent financial regulations, while also recommending further market and currency diversification.

President Trump had previously suggested that China’s economy would collapse due to US tariffs, a narrative that the study’s findings for Hong Kong and mainland China surprisingly challenged.

A new study by the POD Research Institute reveals that Hong Kong stands as the second most resilient economy among five major Asian counterparts against potential global tariff shocks imposed by the United States, surpassed only by Singapore. The local think tank’s “Economic Resilience Index,” released on Tuesday, attributes Hong Kong’s strong performance to its diversified trade, robust foreign exchange reserves, and stringent financial regulations, while also recommending further market and currency diversification.

Study Context and Findings

Ronny Tong Ka-wah, head of the POD Research Institute and a member of Hong Kong’s Executive Council, stated the study was initiated in response to President Trump’s earlier remarks suggesting a collapse of China’s economy due to US tariffs. President Trump had announced a 10 percent “baseline” tariff on all US imports in April of this year, followed by his comments on China in May.

Tong expressed surprise at the findings, noting, “Surprisingly, we found Hong Kong and mainland China were doing well in the light of the US tariffs.” This indicates the study’s findings challenged some prevailing narratives regarding the impact of US trade policies.

Recommendations for Future Resilience

Beyond identifying current strengths, the report also urged Hong Kong to accelerate institutional reforms and continue expanding its market and currency options. These recommendations aim to bolster the city’s preparedness for future economic uncertainties and maintain its competitive edge.

Outlook

The POD Research Institute’s findings underscore Hong Kong’s current economic stability amidst global trade tensions, particularly concerning US tariffs. However, the report also highlights the ongoing need for strategic diversification and reform to ensure sustained resilience in a dynamic international economic landscape.