When the Chinese government granted preliminary approval to 38 of President Trump’s trademarks shortly after he announced that he was committed to One China Policy for the first time, many deemed this action as a violation of the emoluments clause because it appeared to be given on a quid pro quo basis for Trump softening his tone with China and refusing to recognize the Republic of China (Taiwan) as free and independent state. Whether it was coincidental timing or suspicious activity, Senator from California Diane Feinstein stated, “If this isn’t a violation of the Emoluments Clause, I don’t know what is.” Although conflicts of interest are nothing new for the Trump Presidency, this case is significant because of President Trump’s previous stance on China and the timing of when these applications were filed.
What is the Emoluments Clause?
The Emoluments Clause appears in Article I of the Constitution and is only about 50 words long. It reads:
“No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince or foreign State.”
An emolument is defined as, “a salary, fee, or profit from employment or office,” and this clause was specifically created based on the concern that US ambassadors in the 1700s could be manipulated by the wealth of foreign powers. As can be seen above, the lack of depth to the clause leaves much open to interpretation.
Trump’s Relationship with China
Those who have been following Donald Trump both as a candidate and now an elected official know that this relationship with China is tumultuous. Before elected, Trump called the Republic of China in December, something a U.S. President hasn’t done since ties were severed in 1979, indicating that he may recognize the Taiwanese state as independent and not respect One China Policy. Along the way, he also accused the Chinese Government of currency manipulation while vowing to renegotiate trade deals and place a 45% tariff on imported Chinese goods. And after taking office and withdrawing from the Trans-Pacific Partnership, the administration stated that United States would prevent China from expanding in the South China sea, a move that was seen by some as the first steps towards war. Although the President is not known for his consistency, his rhetoric regarding China changed overnight by backing One China policy during a phone call to President Xi Jinping in early February.
One of the main issues lies in the timing of when these trademarks were registered. According to reports, Trump filed applications to register 42 trademarks in China on April 15, 2016, almost one year after formally announcing his candidacy and just three months before becoming the Republican nominee. While it’s unreasonable to assume that he was aware he would win the presidency and be able to use it to leverage business dealings in China after the fact, the timing does seem curious considering that he had been locked in a steady legal battle over other trademarks for almost a decade. Nevertheless, these marks were registered before he was elected president and due to the brevity of the emoluments clause, it does not specify whether or not it applies to those seeking office.
Was This A Violation?
Taking the clause at face value, one side argues that Trump’s business dealings directly violate the Constitution because his company, of which he is still the sole designated beneficiary, is profiting from business dealings with a foreign government through the registration of trademarks. Especially with the timeline of events, it does feel as if both sides were willing to help each other out for mutual gain. The other side, however, argues that there was no collusion and paying for a hotel room or service is not a gift or present, rather a strictly legal business dealing. Furthermore, the Trump team has stated that all profits from foreign governments at his hotels would be turned over to the U.S. Treasury anyway, something that would nullify the emoluments argument. However, this framework has yet to be detailed by the administration.
The Future of IP Relations with China
Although many critics are caught up with the idea of constitutional violations, some have chosen to paint this issue with a positive spin in regard to the global acceptance of intellectual property rights. It’s no secret that intellectual property rules and rights in China are shaky at best. China uses a “first to apply system” which means that ideas are stolen on a whim and there is little enforcement thereafter. It has earned the reputation as the land of the copycats for a reason. As stated above, the Trump team is no stranger to this issue when, back in 2006, the Trump trademark in the construction industry was registered by a Chinese man named Dong Wei, thus leading to significant legal setbacks for almost 10 years.
However, a trademark attorney from Los Angeles argues that the registration of these marks represent a positive for foreign businesses and trademark holders alike because intellectual property rights are finally beginning to gain acceptance worldwide. Take for example the case of Michael Jordan, who won a case in the Chinese Supreme Court late last year, giving him the rights to his Chinese name and representing one of the first victories for an American company overseas. Prior to this point, America companies like New Balance was sued for using the Chinese translation of its own name and a leather goods company was given the rights to print “iPhone” on its wallets over Apple. While many blame favoritism for the registration of Trump’s trademarks, others see this as an opportunity for improved efficacy of the Chinese intellectual property legal framework for years to come.
Did these trademarks violate the Constitution? It’s hard to say. Even if we assume that the trademarks were not granted as a bargaining chip, the potential conflicts of interest within the administration are multiplying at an alarming rate. As the question becomes whether or not the Trump administration has the ability to separate legal duty from business interests, it appears more likely that the two will become even more entangled over time.
Update 4/18/2017 – Ivanka Trump also received approval for three new Chinese trademarks on the same day she met with China’s president.