US lets Hong Kong order lapse, China sees step towards restoring privileges

Hongkong,UPDATED: Jul 17, 2026 22:58 IST

China on Friday indicated that the United States could restore Hong Kong's preferential privileges, saying Washington had confirmed it would not renew an executive order that revoked the city's special trading status. Beijing said the move was an important step in carrying out understandings reached during US-China trade talks in Madrid last year.

The immediate impact of the decision was not clear. The White House referred questions on the lapse of the executive order to the Treasury Department, while the US Office of Foreign Assets Control said the national emergency declared under the order had expired and that people sanctioned under it had been removed from that list.

China's Commerce Ministry said the US had made commitments on Hong Kong issues and other matters during the trade talks in Madrid. The US had recently confirmed to China that the President's Executive Order on Hong Kong Normalisation would end, the ministry said in a statement issued in response to media questions.

"The US side's actions represent an important step in fulfilling the consensus reached during the bilateral economic and trade talks. China appreciates it," the ministry said.

The US Office of Foreign Assets Control said, however, that people who remain sanctioned under another law related to Hong Kong had been moved to a different sanctions list. Its statement showed that Hong Kong leader John Lee and his predecessor Carrie Lam were removed from the first list but added to the second one.

The US decision came two months after President Donald Trump met Chinese President Xi Jinping in Beijing. It could help improve ties ahead of Xi's expected visit to the US later this year. Earlier this month, a pastor of a prominent underground church who had been detained in China in October was released after Trump raised his case with Xi.

Trump signed the executive order, which has now expired, in July 2020 during his first term after Beijing imposed a national security law on Hong Kong that year. The order was last renewed for a year in July 2025.

Under the order, Trump said Hong Kong was no longer sufficiently autonomous to justify different treatment from mainland China under certain US laws. It ended preferential treatment for Hong Kong to the extent permitted by law and in line with the national security, foreign policy and economic interests of the United States.

China has said the national security law was necessary to restore stability in Hong Kong after the large anti-government protests of 2019. The pro-democracy movement was one of the biggest challenges faced by the Communist Party in Beijing and the Hong Kong government since the former British colony returned to Chinese rule in 1997.

Six years after the law was introduced, many leading activists, including pro-democracy former media tycoon Jimmy Lai, have been jailed under it. Critics say the Western-style civil liberties that Beijing had promised to preserve for 50 years after the handover have weakened.

The Hong Kong government said it had noted the "positive shift in the US policy" towards the city. "Safeguarding Hong Kong's prosperity and stability serves the common interests of China and the US, and also aligns with the general expectation of the international community," it said.

It said it hoped the US would respect China's sovereignty and the rule of law in Hong Kong and resume normal economic and trade exchanges with the city. Overall, China and Hong Kong described the lapse of the order as a positive change, even as US sanctions linked to another Hong Kong law remain in place.

With PTI Inputs

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