Actually, Trump Loves Chinese Goods—So Long as they Make Him Richer

Peter Certo

Trump family members (L to R) Eric Trump, Donald Trump Jr., Donald Trump and Ivanka Trump break ground at the Trump International Hotel Washington, D.C Groundbreaking Ceremony at Old Post Office on July 23, 2014 in Washington, D.C. (Photo by Paul Morigi/WireImage)

Don­ald Trump built no small part of his polit­i­cal brand rail­ing against Chi­nese indus­try — so much so that The Huff­in­g­ton Post once pub­lished a super­cut of the pres­i­dent sneer­ing the word Chi­na” dozens and dozens of times, for three full minutes.

While Trump’s high­ly charged lan­guage about Chi­na rap­ing our coun­try” show­cased the pres­i­den­t’s usu­al xeno­pho­bia, the part about lost jobs spoke to real eco­nom­ic pain that oth­er politi­cians appeared to ignore. The mes­sage played well in parts of the coun­try — like my home state of Ohio, and much of the Mid­west besides — that suf­fered griev­ous­ly as pros­per­ous indus­tries pulled up their stakes and moved fac­to­ries to oth­er coun­tries, Chi­na chief among them. 

Despite wild pol­i­cy fluc­tu­a­tions on oth­er fronts, Trump has been unchar­ac­ter­is­ti­cal­ly con­sis­tent on this point. For the last few months he’s been stok­ing a pos­si­ble trade con­flict with Chi­na, threat­en­ing tar­iffs on up to $150 bil­lion worth of Chi­nese goods and draw­ing Chi­nese threats to penal­ize U.S. indus­tries in turn (can­ni­ly, often from the very regions that sup­port­ed Trump in the 2016 election). 

The pres­i­dent even that tweet­ed he was look­ing for­ward to a trade war. (They’re easy to win,” he said.) But with­in a few weeks, he seemed to roll over, sus­pend­ing most of those tar­iffs while trade talks were under­way. We’re putting the trade war on hold,” Trea­sury Sec­re­tary Steve Mnuchin told Fox News.

Trump ini­tial­ly claimed that he’d got­ten the Chi­nese to decrease their trade sur­plus by up to “$200 bil­lion” — a claim the Chi­nese gov­ern­ment flat­ly denied. By all appear­ances, Bei­jing sim­ply made vague, unen­force­able assur­ances to pur­chase con­sumer goods they were prob­a­bly going to buy anyway.

For this, Chi­na did­n’t just get a reprieve on tar­iffs. It won a reprieve for a major Chi­nese cor­po­ra­tion accused of run­ning seri­ous­ly afoul of U.S. sanctions.

If Trump want­ed a boogey­man for his broad­sides against Chi­nese indus­try, it would’ve been hard to come up with a bet­ter one than the Chi­nese phone mak­er ZTE. It’s China’s sec­ond-largest telecom­mu­ni­ca­tions firm, a third of which is report­ed­ly owned by state entities.

But ZTE is no ordi­nary com­peti­tor for Amer­i­can firms. It’s also been offi­cial­ly sanc­tioned by the U.S. gov­ern­ment for sell­ing goods with Amer­i­can-made parts to Iran and North Korea, and then lying about its efforts to address Washington’s com­plaints. Not only that, but some experts have wor­ried that the com­pa­ny could be using its phones as sur­veil­lance devices. The U.S. mil­i­tary has even banned the sale of ZTE phones on mil­i­tary bases.

Those sanc­tions may have been dra­con­ian, and per­haps the mil­i­tary’s con­cerns were para­noid. But the cut-and-dry nature of the vio­la­tions gave the admin­is­tra­tion a chance to exer­cise the sort of cor­po­rate over­sight it often pro­fess­es but sel­dom prac­tices. This spring, Trump’s own Com­merce Depart­ment announced a sev­en-year ban on U.S. com­pa­nies sell­ing ZTE com­po­nent parts, like the microchips it des­per­ate­ly needs. The move was expect­ed to put the giant out of business.

But then, in a move that The Wash­ing­ton Post reports went com­plete­ly out­side the usu­al White House pol­i­cy chan­nels, Trump made a stun­ning rever­sal: He was order­ing Com­merce Sec­re­tary Wilbur Ross to ease the sanc­tions. And more aston­ish­ing­ly, Trump tweet­ed that he want­ed ZTE to get back into busi­ness, fast” — because there were too many jobs in Chi­na lost.”

In addi­tion to being a pol­i­cy 180, this was extreme­ly off-brand. The pres­i­dent boast­ful­ly tweet­ing about sav­ing jobs in Chi­na was, arguably, far more bizarre than his typ­i­cal Fox and Friends live­blogs, or even dada-esque mas­ter­pieces like cov­fefe.” (Remem­ber that?) And right in the mid­dle of a pos­si­ble trade war of his own mak­ing, too.

The ques­tion, nat­u­ral­ly, is why?

Main­stream media out­lets duti­ful­ly offered seem­ing­ly plau­si­ble expla­na­tions. The Wash­ing­ton Post report­ed that In exchange for eas­ing restric­tions on ZTE, U.S. offi­cials are press­ing Chi­na to relax tar­iffs on agri­cul­tur­al prod­ucts and allow a U.S. tech­nol­o­gy com­pa­ny, Qual­comm, to acquire NXP Semi­con­duc­tors.” So per­haps it was a sim­ple con­ces­sion in hopes of get­ting a bet­ter deal?

NPR, mean­while, quot­ed an expert who sug­gest­ed that ban­ning U.S. microchip exports to ZTE would only encour­age Chi­na to devel­op its own advanced tech­nol­o­gy, which wor­ried some nation­al secu­ri­ty folks. Zhe­jiang University’s Dou­glas Fuller explained that the ban was antag­o­niz­ing Chi­na to dou­ble down on more tech­no-nation­al­ist import sub­sti­tu­tion poli­cies,” which (I guess) sounds like a problem. 

Oth­ers spec­u­lat­ed that it was an attempt to get Chi­nese help with the upcom­ing North Korea sum­mit, which Trump sub­se­quent­ly made a big show of canceling.

Per­haps all of these accounts were too gen­er­ous. In fact, there might be a far sim­pler expla­na­tion for the rever­sal, one much more on-brand with Trump prac­tices to date: plain old self-dealing.

Just 72 hours pri­or to Trump’s rever­sal on ZTE, The Huff­in­g­ton Post reports, the Chi­nese gov­ern­ment — which, recall, also owns enti­ties con­trol­ling at least a third of ZTE — made a $500 mil­lion loan to some Trump-brand­ed prop­er­ties in Indone­sia. And Chi­nese banks promised anoth­er $500 mil­lion to the same. The Trump Orga­ni­za­tion has acknowl­edged the deal but refused to com­ment, while a White House spokesman asked about the deal said sim­ply, I’ll have to refer you to the Trump Organization.” 

It also prob­a­bly did­n’t hurt that dur­ing the very same week, Chi­na approved sev­en new trade­marks for Ivan­ka Trump, Trump’s daugh­ter and White House advisor. 

Viewed in this light, Trump’s ZTE deal feels like far less of a rever­sal. It’s per­fect­ly con­sis­tent for a pres­i­dent who’s praised Pres­i­dent Rodri­go Duterte of the Philip­pines — whose drug war has killed over 20,000 peo­ple, yet whose cap­i­tal also hosts an upcom­ing Trump Tow­er (the devel­op­er, in turn, is Duterte’s spe­cial envoy to Trump). Or for a pres­i­dent with exten­sive poten­tial con­flicts in the Unit­ed Arab Emi­rates, which hap­pens to be enjoy­ing U.S. sup­port as it con­ducts (with Sau­di Ara­bia) a dev­as­tat­ing U.S.-backed war in near­by Yemen. 

Or, for that mat­ter, a pres­i­dent who signed a tax plan seem­ing­ly tai­lor-made to save him­self bil­lions of dollars.

For­mer White House ethics lawyer Richard Painter calls the ZTE episode yet anoth­er vio­la­tion of the emol­u­ments clause of the Con­sti­tu­tion,” which bans the pres­i­dent from tak­ing mon­ey from for­eign gov­ern­ments. If that feels quaint to point out at this point, it’s no less quaint to recall that Trump first pledged to divest him­self of his Trump Orga­ni­za­tion hold­ings, and then back­tracked. (And then pledged not to open any new for­eign busi­ness while he was in office, and then back­tracked on that too.)

The ZTE case is ripe with Trump’s favorite punch­ing bags — Chi­na, Iran, North Korea. It’s low-hang­ing fruit for his com­plaints about trade as well as nation­al secu­ri­ty. So if Trump’s not look­ing out for Amer­i­can indus­try in this polit­i­cal­ly eas­i­est of cas­es, or even heed­ing his own leery mil­i­tary, you can bet he’s not look­ing out for out-of-work fac­to­ry line­men in Michi­gan, Ohio, or Penn­syl­va­nia either. 

He’s look­ing out, as always, for the gaudy let­ters embla­zoned on the front of his tacky hotels.

This arti­cle was joint­ly pro­duced by In These Times and For­eign Pol­i­cy In Focus.

Peter Cer­to is the edi­to­r­i­al man­ag­er of the Insti­tute for Pol­i­cy Stud­ies. He edits its For­eign Pol­i­cy In Focus and Oth­er­Words ser­vices and coach­es writ­ing in the New Econ­o­my Mary­land Fel­low­ship pro­gram. He’s a for­mer asso­ciate edi­tor of Right Web, a project that mon­i­tors efforts to influ­ence U.S. for­eign pol­i­cy, and helped coor­di­nate the first annu­al Glob­al Day of Action on Mil­i­tary Spending.
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