July 18, 2026 — After six years of escalating sanctions, export controls, and diplomatic friction, the United States has allowed its national emergency declaration on Hong Kong to expire. The decision, confirmed by both Beijing and the Hong Kong SAR Government on July 17, marks the most significant reset in US-Hong Kong relations since the turbulent summer of 2020.
On the evening of July 17, the Hong Kong SAR Government issued an unusually conciliatory statement welcoming the US decision not to renew the national emergency relating to Hong Kong. The government called it "an important step in implementing the China-US economic and trade consensus."
The statement noted that "safeguarding Hong Kong's prosperity and stability serves the common interests of both countries" and "aligns with the general expectations of the international community." In a notable departure from the fiery condemnations of years past, the SAR Government urged the US to "respect China's sovereignty and the rule of law in the Hong Kong SAR" and expressed hope for "the resumption and strengthening of normal economic and trade exchanges."
China's Ministry of Commerce issued a parallel statement through its spokesperson, confirming that during the China-US economic and trade consultations held in Madrid in 2025, the US side had made commitments on issues including Hong Kong and investment. The spokesperson added that China hopes the US will honor those commitments and "contribute positively to building a constructive China-US relationship of strategic stability."
Executive Order 13936 — the legal instrument underpinning the emergency — formally expired on July 14, 2026, exactly six years to the day after President Donald Trump signed it at the Resolute Desk in 2020.
To understand the significance of this expiration, one must first appreciate the sweeping scope of EO 13936. Signed on July 14, 2020, and titled "The President's Executive Order on Hong Kong Normalization," the order was Washington's direct response to Beijing's imposition of the Hong Kong National Security Law on June 30, 2020.
The order's preamble described the situation in Hong Kong as "an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States." President Trump declared that Hong Kong would henceforth be treated the same as mainland China under US law — revoking the special status the territory had enjoyed since the 1997 handover.
The provisions were far-reaching:
Export Controls: Hong Kong lost its privileged license exceptions under the Export Administration Regulations, and all exports of US-origin defense equipment to the territory were terminated.
Sanctions Regime: The Treasury and State Departments were authorized to impose sanctions on foreign persons involved in implementing the national security law, undermining Hong Kong's autonomy, or committing human rights abuses. This led to six rounds of sanctions over five years targeting dozens of senior officials.
"Made in Hong Kong" Erased: As of September 2020, US Customs and Border Protection required all goods produced in Hong Kong to be marked "Made in China" — reversing a practice dating back to June 1997.
Immigration Restrictions: Hong Kong residents were reclassified alongside mainland Chinese nationals for visa quotas, visa waiver programs, and the Diversity Immigrant Visa lottery.
Bilateral Agreements Suspended: The US suspended the fugitive offender surrender agreement, terminated the transfer of sentenced persons agreement, and ended the 1989 reciprocal tax exemption for shipping income.
Academic and Cultural Ties Severed: The Fulbright exchange program with Hong Kong was terminated, along with a USGS-CUHK satellite research collaboration.
Every year from 2020 through 2025, both the Trump and Biden administrations renewed the national emergency declaration. The last renewal came in July 2025, just weeks before the Madrid consultations that would ultimately change the trajectory.
The sanctions history under EO 13936 reads like a who's-who of Hong Kong governance. The first round in August 2020 targeted Chief Executive Carrie Lam, Police Commissioner Chris Tang, then-Security Secretary John Lee (now Chief Executive), Justice Secretary Teresa Cheng, and seven other senior officials. All were placed on the Specially Designated Nationals (SDN) list, freezing any US-based assets and prohibiting American citizens from transacting with them.
By the time the last round hit in March 2025 — targeting Justice Secretary Paul Lam, Police Commissioner Raymond Siu, and four other national security officials — the cumulative effect had created a deeply awkward operating environment. Sanctioned officials could not use US dollar-denominated banking, travel to the US, or conduct any business with American entities. For a city that prides itself as a global financial hub, the symbolism was as damaging as the practical effects.
The HKSAR Government's posture throughout this period was consistently defiant. As recently as July 11, 2025, the government issued an extraordinary condemnation of the US extension, accusing Washington of "blatantly and repeatedly breaching international law" and describing the sanctions as "despicable political maneuvers" that were "doomed to fail."
That this same government is now describing the expiration as a "positive shift" and speaking of "common interests" underscores just how dramatically the political calculus has changed.
The pivot point came in 2025, during the China-US economic and trade consultations held in Madrid. While the full details of those discussions remain confidential, the outcome is now clear: the US committed to addressing several Chinese concerns — including Hong Kong's status — in exchange for progress on trade and investment issues.
The timing is significant. By 2025, the broader US-China relationship had begun a tentative thaw. Both sides faced domestic economic pressures that made de-escalation attractive. For the US, the Hong Kong national emergency had become something of an anachronism — a policy lever that had lost much of its strategic relevance while continuing to complicate bilateral trade negotiations.
The expiration also reflects a pragmatic recognition in Washington that the sanctions regime had achieved its symbolic purpose but produced limited tangible results. Hong Kong's national security architecture — comprising both the 2020 Hong Kong National Security Law and the 2024 Safeguarding National Security Ordinance (Article 23 legislation) — remains firmly in place. No sanctioned officials were removed from their positions as a result of US pressure.
The expiration of EO 13936 carries concrete consequences across multiple domains:
Trade and Labeling: Perhaps the most immediate commercial impact will be the restoration of "Made in Hong Kong" as a valid country-of-origin marking for US imports. This carries both practical and symbolic weight, particularly for Hong Kong's manufacturing and re-export industries.
Sanctions Relief: Individuals currently on the SDN list under EO 13936 authorities will eventually be delisted, restoring their access to US dollar transactions and international banking. The timeline for this process remains unclear — administrative delisting requires formal action by the Treasury Department's Office of Foreign Assets Control (OFAC).
Immigration Normalization: Hong Kong passport holders should regain their separate status under US immigration law, including access to visa waiver programs for Guam and the Northern Mariana Islands.
Bilateral Agreements: The path is now open for the potential resumption of the suspended fugitive offender and sentenced person transfer agreements, as well as the reciprocal shipping tax exemption. The SAR Government explicitly expressed hope for "resumption and strengthening of normal economic and trade exchanges."
Investment Climate: The removal of the national emergency designation removes a significant red flag for institutional investors conducting compliance due diligence on Hong Kong-related investments. This could modestly improve capital flows into the territory.
Symbolic Significance: Perhaps most importantly, the expiration signals that the US no longer formally views the situation in Hong Kong as "an unusual and extraordinary threat" to American national security. This is a meaningful diplomatic reset, even if underlying US concerns about Hong Kong's autonomy remain unresolved.
The mood music has clearly improved, but this is a pragmatic reset rather than a full reconciliation.
The HKSAR Government's statement struck a notably forward-looking tone, expressing hope that the US would "resume and strengthen normal economic and trade exchanges." This aligns with Hong Kong's broader push to reaffirm its position as an international business hub — a campaign that has included talent attraction schemes, family office incentives, and aggressive post-pandemic tourism promotion.
Yet significant challenges remain. The Hong Kong National Security Law and Article 23 legislation remain in full effect. The underlying tensions that prompted EO 13936 in the first place — divergent views on Hong Kong's autonomy, rule of law, and political freedoms — have not been resolved. And the broader US-China relationship, while improved from its 2022-2023 nadir, remains fundamentally competitive.
What the expiration does represent is a recognition by both sides that maintaining a perpetual state of emergency served neither country's interests. For Hong Kong, it removes a persistent irritant in its international relations and opens the door — at least partially — to a more normal footing with its second-largest trading partner. For the US, it clears the decks for a more focused trade and investment dialogue with China, unencumbered by a sanctions regime that had long since achieved its primary signaling function.
As one door closes on a turbulent chapter in US-Hong Kong relations, another opens — cautiously, tentatively, but unmistakably — on what both sides hope will be a more constructive phase.
