Donald Trump is reported to owe tens of millions of dollars to China, through a real estate debt which falls due in 2022, offering “astonishing leverage” to Beijing.
The debt derives from a 30% share the US president owns in a billion-dollar building on the Avenue of the Americas in Manhattan, which was refinanced in 2012, with $211m of the funding coming from the state-owned Bank of China, Politico reported on Friday.
The Chinese debt complicates Trump’s emerging election strategy of portraying his Democratic opponent, Joe Biden, as being soft on China. In a briefing on Saturday, Trump said that “China will own the United States” if Biden was elected in November.
But China is heavily involved in the Trump business empire. A Chinese state-owned construction company is helping build the Trump World Golf Club in Dubai, and Beijing has awarded trademarks to the president’s daughter, Ivanka. In the past, Ivanka’s husband (and a White House adviser), Jared Kushner, has sought Chinese finance for at least one major real estate deal.
The president is a passive minority investor in the 1290 Avenue of the Americas office tower. The main investor is Vornado Realty Trust, which owns 70%.
Neither the White House nor the Trump Organization responded to requests for comment. Trump has officially handed over the day-to-day running of his business empire to his sons, but he benefits financially from its profits, producing multiple conflicts of interest. The Trump Organization has recently applied for coronavirus compensation from the government.
Trump’s approach to China has alternated between combative and unctuous, particularly in relation to the Chinese president, Xi Jinping, with whom Trump has consistently claimed to have an excellent personal relationship.
Trump tweeted on 24 January, in the early stages of the pandemic: “China has been working very hard to contain the Coronavirus. The United States greatly appreciates their efforts and transparency. It will all work out well. In particular, on behalf of the American People, I want to thank President Xi!”
“I study Beijing’s influence on America, and this is the most problematic conflict of interest I’ve seen,” Isaac Stone Fish, a senior fellow at the Asia Society, wrote on Twitter. “The Bank of China is a state-owned bank, controlled by China’s State Council, the country’s major administrative body, chaired by the Premier Li Keqiang.
“The leverage this presents is astonishing. What if the Bank of China cancels the loan, or requires Trump to pay it back earlier?” Fish asked. “Is this why Trump often praises Chinese Chairman Xi Jinping? Does this cause him to temper his policies or his public remarks? This raises so many questions.”