- Cost of goods: If the US t-shirt shop imports t-shirts or materials from Hong Kong, the value of the Hong Kong dollar will affect the cost of those goods. If the Hong Kong dollar is weak against the US dollar, the t-shirt shop will be able to buy more for its money, which could lead to lower production costs. Conversely, if the Hong Kong dollar is strong, the t-shirt shop will have to spend more for its goods, potentially increasing production costs.
- Pricing: The t-shirt shop may adjust its prices based on the value of the Hong Kong dollar. If the Hong Kong dollar is weak, the shop may lower its prices to attract customers from Hong Kong. If the Hong Kong dollar is strong, the shop may raise its prices to make sure it is still making a profit.
- Competition: The t-shirt shop may be competing with other shops that import goods from Hong Kong. The value of the Hong Kong dollar can affect the competitiveness of these shops. If the Hong Kong dollar is weak, the t-shirt shop may be more competitive because it can offer lower prices. If the Hong Kong dollar is strong, the shop may be less competitive because it will have to charge higher prices.