The value of Hong Kong’s goods exports recorded a year-on-year increase of 10.9 percent in the first quarter of this year, before the United States’ sweeping tariff announcement on April 2.

While financial analysts cautioned that global trade tensions will pose challenges to Hong Kong's merchandise trade performance, the government of the Hong Kong Special Administrative Region is confident that the city’s trade and logistics sector can weather the storm.

Hong Kong’s merchandise goods export value posted a better-than-expected annual growth of 18.5 percent in March to HK$455.5 billion ($58.4 billion),  after the year-on-year increase of 15.4 percent in February, according to Census and Statistics Department figures released on Monday.

As the value of goods imports soared 16.6 percent annually to HK$500.9 billion, this led to a trade deficit of HK$45.4 billion recorded in March.

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On a quarterly bases, the value of goods exports hiked 12.7 percent in the first quarter of 2025 compared to the fourth quarter of 2024.

The value of Hong Kong’s goods exports to Taiwan has jumped 61.3 percent, followed by Malaysia (57.3 percent) and Vietnam (41.3 percent). Goods exports value to the Chinese mainland soared 25.4 percent while the figure has also risen 11.4 percent for the US.

Eunice Tan, Asia-Pacific head of research at S&P Global Ratings, said strained China- US relations will affect Asia-Pacific economies.

“Given the region's integrated trade ties with both the Chinese mainland and the United States, it will further strain confidence, and severely disrupt supply chains and global trade flows. Together, these events could spur a sharper global slowdown.”

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The US-based credit rating agency trimmed its economic growth forecast for Hong Kong in 2025 and 2026 to 1.7 percent and 1.9 percent respectively, assuming that the US tariff levy announcement on April 2 will be fully implemented. In March, the agency predicted Hong Kong economy will expand 2.2 percent and 2.3 percent respectively in 2025 and 2026.

 Last year, Hong Kong’s economy grew 2.5 percent, with external goods exports increased by 4.7 percent.

But the Hong Kong government is more confident that the city’s external trade sector can weather the storm.

“The steady growth in the mainland economy, together with Hong Kong's proactive efforts in enhancing economic and trade ties with different markets, should help buttress trade performance,” a government spokesperson said in the Monday statement.

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He added that the administration has been providing support to enterprises through various measures in coping with the external challenges, and will monitor the situation closely.

Given the likely impact of US tariff levies, the Hong Kong Trade Development Council has also adjusted the forecast of Hong Kong’s export growth from 4 percent to 3 percent for 2025.