Despite growing bipartisan pressure among U.S. legislators to take more aggressive action against China, the White House's latest actions in Hong Kong indicate the administration still seeks to avoid any moves that could substantively damage the city's status as an economic hub or jeopardize the U.S.-China phase one trade deal. On July 14, U.S. President Donald Trump announced the issuing of an executive order invoking the United States-Hong Kong Policy Act of 1992 to certify the city no longer warrants autonomous treatment under U.S. law, as well as the signing of the Hong Kong Autonomy Act (HKAA) into law. These two actions mark another step in the incremental escalation of U.S. pressure on China over its implementation of a severe new national security law in the city but still fall short of more extreme moves Washington could take, reflecting a still cautious White House strategy. 

Trump's executive order falls short of imposing a significant penalty on Hong Kong or Beijing that would provoke an escalatory response from China, likely to preserve some strategic aspects of his administration's bilateral relationship with Beijing. The order specifically applies to U.S. tariffs on Hong Kong's exports on par with China, eliminates Hong Kong passport holders' preferential treatment, suspends the extradition treaty with the city, ends U.S. arms sales to and the training of Hong Kong police, and opens up the United States further to Hong Kong asylum seekers.

• The application of China-level U.S. tariffs to Hong Kong would hit about $1.77 billion in the city's domestic exports to the United States, which is around 2 percent of its manufacturing production and 0.1 percent of total exports.
• The Hong Kong extradition treaty has only been used twice between 2015 and 2018, with five U.S. requests rejected. In terms of the passport status change, the application process and duration for mainlanders and Hong Kongers is currently almost identical. 
• Leaks indicate that the Hong Kong police will be able to easily replace equipment that they have been receiving from the United States with other suppliers.
• The U.S. measures on Hong Kong have not yet targeted the city's vital services sector, particularly its financial sector. On July 14, White House leaks emerged indicating that the administration decided against measures that would undermine Hong Kong's crucial peg to the U.S. dollar. 

The signing of the Hong Kong Autonomy Act also demonstrates that the administration maintains broad latitude in terms of how to shape sanctions in light of its broader China strategy. The law does set the stage for potential sanctions on Chinese and Hong Kong officials over the erosion of the city's autonomy, with the potential for foreign financial institutions that transact with them to be hit as well.

• On July 14, the White House issued a statement clarifying that it interprets the section of the act that places some requirements on the president if he declines to sanction an individual or entity as "advisory and non-binding.”
• Although the bill moved quickly through both houses of Congress after it was introduced in May, the Trump administration reportedly slowed its passage to impose revisions that would grant the U.S. Department of Treasury greater control over sanctions targets, suggesting an intention to more carefully tailor sanctions. 
• The new U.S. sanctions against China's Uighur crackdown in Xinjiang, along with the and the U.S. State Department's recent rejection of China's South China Sea territorial claims, have also fallen short of measures that would derail U.S.-China relations.