GOVERNMENT trade officials are scrambling today to analyse the local impact of Washington's decision to impose tariffs on Chinese imports worth US$1.08 billion annually. United States Trade Representative Mickey Kantor said late on Saturday night that the sanctions would become effective on February 26, while Beijing released its own list of US goods to be hit by 100 per cent tariffs. Beijing said also it would suspend talks over major projects with leading US car-makers if US sanctions took effect. Assistant Director-General of Trade Stanley Ying said his department was still assessing the potential adverse effects on Hong Kong in the light of Washington's final list. The department estimates that about $470 million, or 0.5 per cent of total of re-exports to the US, will be affected. Mr Ying added that companies with a high level of China business could be hardest hit. 'The next priority is to study the US retaliation very carefully and to assess the potential impact on Hong Kong if it is implemented,' said Mr Ying. The department has appealed to Washington to consider the economic impact on Hong Kong but Mr Ying said it was still 'too early to talk about sanctions and the actual effects'. Both sides were seeking ways of reaching agreement, he said. The news is expected to spark some selling pressure when the share market opens today. 'This has to be negative for the stock market,' said John Mulcahy, managing director at UBS Securities Hong Kong. 'It will be another nail in the coffin, another factor contributing to the gloom.' Chris Malpass, sales director at Peregrine Brokerage, said there were still widespread expectations of a resolution before the tariffs were imposed. But he added: 'I do expect some selling pressure on the back of this news, but not extensive.' The US list of Chinese goods to be hit included cellular telephones, answering machines, kitchenware, bicycles, plastic articles, wristwatches, furniture and footwear. The list includes major re-export items for Hong Kong. In 1993, the US imported $696.3 million worth of cordless telephones, cellular radio telephones and answering machines, including Hong Kong re-exports totalling $511.8 million. The US imported $118.3 million worth of footwear from China, of which $75.6 million was re-exported through the territory, according to government figures released last month. It also imported $461.2 million worth of mainland-made plastic articles, of which Hong Kong re-exports were worth $315 million. Furniture is also a major re-export item: of the $380.7 million exported to the US from China in 1993, about $148.7 million went through Hong Kong. Hong Kong re-exports average 61 per cent of the $2.24 billion in US imports from China, or $1.45 billion. The Hang Seng Index is down almost nine per cent so far this year, hit by concerns about a soggy real estate market and the health of Chinese leader Deng Xiaoping. The rise in interest rates announced last week is also expected to dampen investor interest and add to the property market's problems in the immediate future. Any sell-off today will probably target Hong Kong and Chinese industrial companies manufacturing products listed by Washington. It will be the first day of real trading since January 27 - the Hong Kong market was effectively closed last week by the Lunar New Year break - and volumes were thin on the 11/2 days the share market was open for business. But local economists and businessmen downplayed the effects of the opening salvoes from Beijing and Washington. 'I think it's very finely balanced,' said Miron Mushkat, chief economist at US investment bank Lehman Brothers. 'My gut feeling tells me that despite the harsh rhetoric, they'll find a way to disengage.' Thomas Gorman, chairman of the American Chamber of Commerce, agreed, predicting a reopening of talks in Washington 'within a couple of weeks'. He said the Sino-US dispute was over the pace at which Beijing tackled the issue of intellectual property rights, not whether it was prepared to address the problems. Hang Seng Bank predicted that the territory would comfortably weather a Sino-US trade war, saying gross domestic product would fall only 0.1 per cent if both sides engaged in tit-for-tat sanctions. It said about 3,800 jobs would be endangered. An official from Guangdong recently predicted that the province could be hard hit by a trade war, saying foreign trade worth $2 billion would be jeopardised. Last year, total US imports from the province, excluding raw materials, were worth $32.5 billion. The official said the province's total exports of shoes alone were worth $2 billion, adding that 30 million pairs, worth between $100 million and $200 million, went to the US. Garment exports, including entrepot trade, were worth $4 billion, including 20 per cent shipped to the US, the Guangdong official said. Toy exports were set at $1 billion, and one-fifth was destined for the US.