A Hong Kong manufacturer, who runs health supplement factories both locally and in the United States, said the sector is facing significant challenges amid the ongoing trade war.

Calvin Chan, vice president of the Chinese Manufacturers' Association, said he expects US production costs to increase by at least 20 percent as manufacturers switch from Chinese materials.

"Many of our industry peers have been using raw materials from the mainland. But with the high tariffs on mainland goods imported into the US, we expect many of them to switch to materials from outside the mainland," he said.

"This will drive up the price of those materials. With our raw material costs rising, our products made in the US will cost more to produce."

Chan said his company has seen thousands mainland orders for US-made products cancelled this month, due to what he described as "political factors".

"They say we're in the midst of a battle, and consumers' appetite for US-made products has recently declined. Trump's actions have ultimately affected many people doing business on the mainland and their livelihoods," he said.

To mitigate the impact, Chan who also chairs the Hong Kong Brand Development Council, said he plans to supply locally-made products to the mainland market.

Chan said he's renovating a smart production facility at the Tai Po InnoPark to increase production capacity by 20 percent.

He noted that mainland consumers have a special preference for Hong Kong brands and are willing to pay higher prices for SAR-made products.