Within three days of the Chinese government agreeing to provide $500 million in loans to an Indonesian theme park that the Trump Organization has a deal to license President Donald Trump’s name to, the president stunningly ordered sanctions be rescinded against a major Chinese telecom company.
As AFP reported via the South China Morning Post last week, the developer of that project just outside of Jakarta had secured the half billion in funding, in addition to another $500 million from Chinese banks, 72 hours before Trump’s Sunday tweet on the Chinese telecom company ZTE. Trump’s family business has a deal with that developer to include the Trump name on the resort, which also includes hotels and a golf course.
“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast,” Trump tweeted Sunday. “Too many jobs in China lost. Commerce Department has been instructed to get it done!”
He added another tweet on the subject Monday, saying that ZTE “buys a big percentage of individual parts from U.S. companies.”
“This is also reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi,” he wrote.
Instead of divesting from his businesses and placing them into a blind trust, Trump instead made an arrangement prior to taking office that put his two adult sons and a senior Trump Organization executive in charge of his interests, and the president continues to profit from them.
“You do a good deal for him, he does a good deal for you. Quid pro quo,” Richard Painter, White House ethics lawyer for former President George W. Bush and currently a Democratic Senate candidate in Minnesota, told HuffPost. “This appears to be yet another violation of the emoluments clause of the Constitution.”
The foreign emoluments clause of the Constitution prohibits the president from receiving any payments from foreign governments.
“This is one of the most blatant examples of the problems that can arise when you have a president who refuses to divest his business interests and doesn’t seem concerned about conflicts of interest,” Larry Noble, the senior director and general counsel of the Campaign Legal Center, told Business Insider. “There is clearly an appearance of a connection between Trump looking to release ZTE from US imposed sanctions three days after the Chinese government and Chinese banks agreed to provide a total of $1 billion in loans to a resort licensing the Trump name from his company.”
Noble said if China’s government made the loan guarantee in hopes of influencing Trump’s decision, it would be in violation of the emoluments clause. If there was an agreement that the resort would get the loans in return for the president waiving the sanctions, it would cross into bribery.
Meanwhile, the White House did not respond to HuffPost’s questions about whether China’s decisions regarding the Indonesian venture had any connection to Trump’s ZTE move. Deputy Press Secretary Raj Shah referred questions about the project to the Trump Organization during Monday’s press briefing. Reached by HuffPost, the Trump Organization said it was involved in the resort but did not answer questions about how much it would make from its deal with the developer.
The recent actions against ZTE were labeled as not just trade enforcement, but a matter of national security. The company’s phones were described as a security risk by the Pentagon and US intelligence agencies. Last year, the company, which is 33% owned by the Chinese government, was fined $1.2 billion for violating US sanctions against North Korea and Iran. The US government later banned the company from purchasing US parts for seven years after the conclusion was made that ZTE officials lied about their actions. In turn, that move led the company to essentially shut down.
Trump’s order was widely panned on both sides of the aisle. It came as a shock for some, as Trump had crusaded against Chinese trade practices on the campaign trail and in office, and has pushed his administration to aggressively take on those practices.
“You can’t make this stuff up,” Independent Sen. Bernie Sanders of Vermont tweeted Monday. “Trump promised over and over again that he would bring back American jobs that have been outsourced to China. Instead of working to bring back outsourced jobs, he is now pledging to help create jobs in China.”
Trump recently enacted substantial steel and aluminum tariffs aimed to curtail oversupply of Chinese metals. Now, the Trump administration and the Chinese government are locked in negotiations over trade. The Wall Street Journal reported Monday that in exchange for the removal of sanctions on ZTE, China plans to drop tariffs on multiple US agricultural products that were leveled in response to those initial steel and aluminum tariffs.