Trade war’s tainted general
The Trump administration’s bellicose trade policy, which is provoking costly economic hostilities with adversaries and allies alike, is cause for consternation on its own. It’s even more disturbing that the people running the trade war can’t be counted on to act solely in the country’s interest.
Commerce Secretary Wilbur Ross, the administration’s point man on trade, has maintained troubling personal and family stakes in ventures that could be directly affected by tariffs and other government measures. According to reports by Forbes magazine and others, they include investments closely associated with the Chinese government and Russian President Vladimir Putin’s regime.
During most of his first year leading the Commerce Department, the magazine reported, Ross held investments in companies backed by Beijing. Now he is leading an expanding trade war with China, among others, in which each country has imposed tariffs on $ 50 billion worth of goods, a figure President Trump is threatening to quadruple. Senators questioning Ross on Wednesday noted that the administration is effectively “picking winners and losers” and moving toward “a government- run, mercantilist economy.” In other words, Ross is making the sort of policy that creates more opportunities to help or harm particular companies and investments.
One of the secretary’s links to China was a joint venture started last year by state- owned Shanghai Shenda and Luxembourg- based International Automotive Components Group, a major manufacturer of interior car parts controlled by Ross’ private equity firm — and another glaring overlap with his official duties. Ross’ department recently launched an investigation into whether imports of vehicles and auto parts harm national security, which could be used to justify tariffs. Trump on Friday threatened to impose a 20 percent tax on European vehicles.
Ross also has held stakes in companies tied to Russian oligarchs and, by extension, Putin. Astonishingly, after reporters inquired about one such holding last fall, Ross shorted the stock, essentially betting that its price would decline. That invites suspicion that the secretary tried to profit from his knowledge of the coming negative reports about his relationship with the company.
While Ross promised to divest from holdings that posed potential conflicts, Forbes reported that he failed to fully do so by the time he filed a sworn statement to that effect. Moreover, some of his divestment was accomplished by the dubious means of transferring holdings to family members, meaning Ross still has an intimate interest in the investments.
Together with the Trump family’s own widespread conflicts of interest, Ross’ holdings cast a dark shadow, indeed, over already questionable trade policies.