Former White House Communications Director Anthony Scarramucci has accused President Donald Trump of trying to "shake down China for personal gain," amid revelations of the president's previously undisclosed business interests in China, as reported by The New York Times on Tuesday.
The Quote
"Trump has tried to shake down China for personal gain throughout his presidency, with limited success. However, it appears to have worked in the case of ZTE. @realDonaldTrump is the real China Virus. #DonTheCon"
Why it Matters
Scaramucci—who was fired from his White House role after just 10 days and is now working with the conservative, anti-Trump Lincoln Project PAC—was referring to China's ZTE telecommunications firm, which was slapped with sanctions in April 2018 for doing business with Iran and North Korea, both of which were under sanctions blocking deals with foreign companies.
But though the sanctions were working, the president rescinded them within two months. The two sides reached a deal to allow ZTE to continue operations. The firm would pay a $1 billion fine and change its board within 30 days, with a U.S.-picked compliance team embedded in the company. ZTE also agreed to give the U.S. $400 million as insurance for compliance.
Then, Trump tweeted in May 2018: "President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!"
The deal baffled lawmakers on both sides of the aisle. GOP Senator Marco Rubio—a prominent China hawk—said: "China on the verge of winning again." Senate Minority Leader Chuck Schumer said: "The president who roared like a lion is governing like a lamb when it comes to China."
Scaramucci's tweet included a link to a report on Trump's ZTE move, tying the lifting of sanctions to the president's business interests.
AFP and The South China Morning Post reported that Trump sent his ZTE tweet days after Beijing approved $500 million in loans to an Indonesian theme park that the Trump Organization has a deal to license the president's name to.
The Times' revelations about Trump's bank account in China, Scaramucci suggested, fits a pattern of the president seeking to enrich himself via his interactions with Beijing.
The Counterpoint
Trump defended his ZTE intervention amid the backlash. "ZTE, the large Chinese phone company, buys a big percentage of individual parts from U.S. companies," he tweeted. "This is also reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi."
Commerce Secretary Wilbur Ross said: "ZTE did do some inappropriate things. They've admitted to that." He added: "The question is: Are there alternative remedies to the one that we had originally put forward? And that's the area we will be exploring very, very promptly."
Regarding the Times' revelations on Tuesday, Trump Organization vice president and chief legal officer, Alan Garten, dismissed the report as "pure speculation" that made "incorrect assumptions."
He said the China account was opened "in order to pay the local taxes" and to "explore the potential for hotel deals in Asia." He added: "No deals, transactions or other business activities ever materialised and, since 2015, the office has remained inactive."
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
David Brennan is Newsweek's Diplomatic Correspondent covering world politics and conflicts from London with a focus on NATO, the European ... Read more
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