If you're wondering why GOP Senate Majority Leader Mitch McConnell has been silent on Trump's trade war, it's because his wife is Transportation Secretary Elaine Chao, and Chao's family is getting extremely rich off of trade politics and has been for years. Chao's 2017 trip to Beijing was canceled over ethics questions, but the US-China trade war is raising an army of new matters.
Ms. Chao has no formal affiliation or stake in her family’s shipping business, Foremost Group. But she and her husband, Senator Mitch McConnell of Kentucky, have received millions of dollars in gifts from her father, James, who ran the company until last year. And Mr. McConnell’s re-election campaigns have received more than $1 million in contributions from Ms. Chao’s extended family, including from her father and her sister Angela, now Foremost’s chief executive, who were both subjects of the State Department’s ethics question.
Over the years, Ms. Chao has repeatedly used her connections and celebrity status in China to boost the profile of the company, which benefits handsomely from the expansive industrial policies in Beijing that are at the heart of diplomatic tensions with the United States, according to interviews, industry filings and government documents from both countries.
Now, Ms. Chao is the top Trump official overseeing the American shipping industry, which is in steep decline and overshadowed by its Chinese competitors.
Her efforts on behalf of the family business — appearing at promotional events, joining her father in interviews with Chinese-language media — have come as Foremost has interacted with the Chinese state to a remarkable degree for an American company.
Foremost has received hundreds of millions of dollars in loan commitments from a bank run by the Chinese government, whose policies have been labeled by the Trump administration as threats to American security. The company’s primary business — delivering China’s iron ore and coal — is intertwined with industries caught up in a trade war with the United States. That dispute stems in part from the White House’s complaints that China is flooding the world with subsidized steel, undermining American producers.
Foremost, though a relatively small company in its sector, is responsible for a large portion of orders at one of China’s biggest state-funded shipyards, and has secured long-term charters with a Chinese state-owned steel maker as well as global commodity companies that guarantee it steady revenues.
In a rarity for foreigners, Angela and James Chao have served on the board of the holding company for China State Shipbuilding, a state-owned enterprise that makes ships for the Chinese military, along with Foremost and other customers. Angela Chao is also on the board at the Bank of China, a top lender to the shipbuilder, and a former vice chairman of the Council of China’s Foreign Trade, a promotional group created by the Chinese government.
Angela Chao, speaking in an interview in New York on Friday, said that her board positions were unremarkable, emphasizing that Foremost did business around the world. She denied that the company had a “China focus” beyond what most dry bulk carriers have in a world dominated by Chinese manufacturing. “We are an international shipping company, and I’m an American,” she said, adding, “I don’t think that, if I didn’t have a Chinese face, there would be any of this focus on China.”
James Chao was not made available for an interview; a representative of the company received written questions from The Times two weeks ago, and the company responded with a fact sheet on Friday.
Though Foremost worked in the late 1960s on American government contracts to ship rice to Vietnam, according to James Chao’s biography, it has almost no footprint left in the United States, save for a modest corporate headquarters in Midtown Manhattan. It registers its ships in Liberia and Hong Kong and owns them through companies in the Marshall Islands.
Since Elaine Chao became transportation secretary, records show, the agency budget has repeatedly called to cut programs intended to stabilize the financially troubled maritime industry in the United States, moving to cut new funding for federal grants to small commercial shipyards and federal loan guarantees to domestic shipbuilders.
Her agency’s budget has also tried to slash spending for a grant program that helps keep 60 American-flagged ships in service, and has tried to scale back plans to buy new ships that would train Americans as crew members. (In China, Ms. Chao’s family has paid for scholarships and a ship simulator to train Chinese seamen.)
In other words, Elaine Chao is making China's maritime shipping industry great again at the cost of the US. Now Trump's trade war with China means that her family is getting rich, and it's coming at the expense of US taxpayers who are getting stuck with billions in new tariffs.
They're all in on the grift.
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