Donald Trump's China Connections Explained

Former President Donald Trump, whose policies on China hardened in his final year in office despite the inking of a historic trade agreement with Beijing, has had extensive commercial interests in the world's most populous nation going back years, his tax records have revealed.

Trump's Chinese business connections, which didn't stop his administration's hawkish turn after the COVID pandemic exploded in the United States in early 2020, are likely to be scrutinized further as he presents his credentials for a third run for the White House's top job while navigating ongoing American skepticism of Beijing, a mood he helped create during his time in office.

In 2016, the Republican became the first presidential candidate in decades to refuse to disclose his tax returns, a position he maintained throughout his four years in the Oval Office. In the run-up to the 2020 election, Trump, backed by senior members of the GOP, also accused Democratic opponent Joe Biden of impropriety in relations to his son Hunter's own past dealings in China.

On December 30, in the final days of Democratic control, the powerful House Committee on Ways and Means published nearly 6,000 pages of Trump's tax records, covering 2015 to 2020 and spanning his time as president. The decision, predictably split along party times, followed a three-year legal battle that began with the former president's Treasury Department, and the Supreme Court's November ruling that gave the committee access to the documents.

The partially redacted records from the Internal Revenue Service revealed six years of complex finances, as well as heavy business losses that could at the very least undermine Trump's campaign image as a successful business magnate. They also provided some ammunition for partisan barb-trading and allegations of conflicts of interest, but perhaps none that could discount him as the Republican front-runner in the next election cycle.

About half the pages dealt with Trump and his wife Melania's joint tax returns, and the other half related to his businesses. When it came to China in particular, the documents showed no obvious hints of nefariousness, but they did raise further questions about his reluctance to disclose.

The most contentious revelation may be that of a Chinese bank account, the existence of which Trump had dismissed during his 2020 presidential campaign, in a period when he labeled Biden "China Joe."

Mandatory filings to the Financial Crimes Enforcement Network, or FinCEN, listed the account between 2015 and 2017, along with accounts in the U.K., Ireland and Saint Martin. It confirmed an October 2020 report by The New York Times, which said the businessman-turned-politician had paid some $188,500 to Chinese tax authorities between 2013 and 2015.

Alan Garten, a lawyer for the Trump Organization, told The Times that the account remained open, but had been inactive since 2015. During a presidential debate two months later, Trump declared: "I closed it before I even ran for president, let alone became president."

The IRS records showed Trump declared foreign earnings from 22 countries or territories. In 2020, his last full year in office, he and Melania paid no federal income tax on negative income of nearly $4.8 million. That year, Trump paid more taxes to foreign countries—nearly $85,000—than he did in the United States.

In 2015, Trump paid $642,000 in federal income tax. Owing to negative income and other deductibles, he paid the IRS $750 in each of the two years that followed. That included 2017, the year of his state visit to China, when he declared $6.5 million in income from business activities in the country and paid nearly $1 million in taxes to foreign countries.

Since the release of the tax reports, a video has resurfaced of former Fox News host Chris Wallace pressing Trump on the $750 figures during a 2020 presidential debate, during which the Republican said he had paid "millions of dollars" in taxes in 2016 and 2017.

In 2018, Trump's federal income tax bill came to nearly $1 million, and he earned approximately the same sum in income from China. The next year, he paid U.S. taxes amounting to a little over $133,000.

Biden's voluntary disclosures, meanwhile, have shown no income or business in China over the years. He also paid more taxes.

Shared commercial interests between wealthy Americans and their Chinese counterparts aren't in themselves unusual. After all, the U.S. and China remain each other's largest trading partner in spite of political differences and geopolitical tensions.

Trump's pursuit of licensing deals and real estate projects in China predates his first run for the presidency. During his time in office, Trump and his daughter Ivanka were also awarded trademarks by Chinese regulators.

His failure to openly discuss the business activities, it would seem, concerned their optics and their potential to undercut the tough-on-China message he has sought to deliver to the American public. Even the U.S.-China trade war and the resultant deal struck with Beijing continues to divide expert opinion.

"The Democrats should have never done it, the Supreme Court should have never approved it, and it's going to lead to horrible things for so many people," Trump said in a fiery press release after his tax returns were published. "The great USA divide will now grow far worse. The Radical Left Democrats have weaponized everything, but remember, that is a dangerous two-way street!"

"The 'Trump' tax returns once again show how proudly successful I have been and how I have been able to use depreciation and various other tax deductions as an incentive for creating thousands of jobs and magnificent structures and enterprises," he said.

"A president is no ordinary taxpayer. They hold power and influence unlike any other American. And with great power comes even greater responsibility," said Rep. Richard Neal of Massachusetts, the Democrat who chaired the House Ways and Means Committee until January 3.

Trump's office didn't return Newsweek's request for comment before publication.

Trump's time as U.S. president didn't start with antagonism with China, but in his last year in office, Washington's policies were led by hawkish members of his cabinet, including frequent critics of the Communist Party such as Mike Pompeo, the former secretary of state, and Matt Pottinger, the former deputy national security adviser.

To be sure, the Trump administration's national security strategy in 2017 had already described China among the "revisionist powers" seeking "to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor."

But the language paled in comparison to the raft of sanctions and other measures that targeted China and members of its ruling party. After laying the blame for the pandemic squarely at the feet of China's leadership, Trump would go on to green-light dozens of visa restrictions, export controls and military maneuvers aimed at the country.

Many of the measures have been kept in place by his successor, who has already landed some serious body blows in his two years in office, rallying allies and partners in Beijing's neighborhood and launching a whole-of-government effort to decouple the U.S. and China in high technology. The restrictions could undermine China's ambitions in emerging technologies such as supercomputing and artificial intelligence, just two of the many areas the White House believes has dual-use—that is, military—applications.

Beijing will be hoping to further stabilize relations with Washington after Biden and Chinese counterpart Xi Jinping met for the first time as presidents last November. But the Democrat and his future Republican challenger will doubtless fight over the best way to address China's long-term challenge to American interests, in a domestic political spat that could have unpredictable consequences for the direction of American foreign policy and make any U.S.-China rapprochement even less likely.

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