Not long ago, China passed a national security law that enabled the Chinese security agencies to take broad actions limiting the liberties of Hong Kong residents. The US strongly opposed such an intervention and called it illegal. Washington announced that it did not consider Hong Kong's autonomous region anymore. Apparently, the country is not going to tolerate such a violation of international treaties. This is why Donald Trump pledged to weigh hard measures against China.
Currently, some top advisers to President Donald Trump are mulling over a plan to undermine Hong Kong dollar peg. They want to impose a ban on Hong Kong banks limiting their ability to buy US dollars. As a result, the local financial regulator, the Hong Kong Monetary Policy Authority (HKMA) will be unable to replenish foreign exchange reserves legally, and the Hong Kong dollar exchange rate will inevitably collapse. In addition, the Hong Kong dollar peg that protects the local currency from devaluation and ensures the stability of the exchange rate since 1983 is considered an anchor for financial stability. Therefore, breaking the peg will upset that whole equation. The US also intends to deny Hong Kong’s access to the SWIFT interbank payment system.
The Hong Kong National Security Law enables Beijing to gain broad new powers to control opposition from usual protesters to news agencies and overseas dissidents. It will serve as a sword of Damocles hanging over the most disobedient citizens. Its legislation means the loss of the region's autonomy. Therefore, the US is thinking over imposing sanctions against China.
