China has approved stricter national security measures against citizen of Hong Kong., The US fears the new security measures increase the risk that sensitive US technology can be obtained by mainland China and the US Commerce Department has already approved suspending special export licenses granted to Hong Kong.

In May, Trump announced he wanted the administration to begin removing special trade privileges provided to Hong Kong. It is likely that the restriction on exporting defense and technology products to Hong Kong will expand to affect import trading as well, unless there is an immediate withdraw of China from Hong Kong.

If Hong Kong loses its trade status it will lose its place as a designated country under the Trade Agreement Act (TAA). Losing status as a designated country will have a ripple effect that will require all resellers with products manufactured in Hong Kong to find new sources in complaint countries or remove them from your GSA and other Federal Contracts.

If you offer products from Hong Kong, we recommend that you begin to search for alternative manufacturing sources. We have a blog that identifies all TAA designated countries.

Once a source is found and a partnership is created, it would become necessary to update your existing contracts with the newly sourced products or software. GSA modifications can take time to develop and have approved, so watch the tensions closely and consider the possible alternatives.

We have completed thousands of modifications of the last 20 years and can assist you with changes to your GSA schedule. If you need assistance or have questions contact Coley at [email protected].

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