Petrotahlil --The US will maintain its phase-one trade deal with China, but it will remove the special treatment it gives Hong Kong, President Donald Trump said on Friday in a speech.

Trump's silence on the trade deal and on possible tariffs indicates that tensions between the two countries have not manifested themselves in trade relations.

US stock markets gave up their losses following Trump's speech.

Nonetheless, Trump brought up earlier grievances that the phase-one trade deal was intended to address.

"For decades they have ripped off the United States like no one has ever done before," Trump said. "China raided our factories, offshored our jobs, gutted our industries, stole our intellectual property and violated their commitments under World Trade Organization."

He accused the Chinese government of stealing US industrial secrets.

Trump also accused China of covering up the spread of the coronavirus, allowing it to become a pandemic.

Regarding Hong Kong, the US will follow up on its declaration of the city no longer being sufficiently autonomous from China to warrant special treatment.

Those provisions included extradition treaty, export controls, dual-use technologies and more, Trump said.

The US issued the declaration after China proposed to introduce a new security law in Hong Kong.

Following the declaration from the US, China's parliament went ahead and approved the security legislation.

FUTURE OF TRADE DEAL

Rising tensions surrounding Hong Kong and the coronavirus led to the possibility that they could spread to trade relations, threatening the thaw that took place early this year.

In mid-January, the US and China signed the phase-one trade deal, which lowered tariffs on some products while addressing some of the grievances of the US with respect to intellectual property, technology transfers and other areas.

The deal did not remove any tariffs on plastics and many on chemicals remained.

However, China did temporarily exempt several plastics and chemicals from the tariffs.

Chinese importers are taking advantage of the exemptions for polyethylene (PE), causing shipments of the material from the US to surge.

A subsequent trade deal could permanently remove the remaining tariffs on chemicals and plastics, further increasing US exports of those products to China.

Polyethylene aside, China is behind on its import goals, and it is unclear whether it could still meet them, given the disruptions caused by the coronavirus.