Trump's U.A.E. chip deal is a national security risk

The United Arab Emirates has spent years seeking access to advanced U.S. chips to help cement its position as a technology hub and fuel its AI aspirations. The Biden administration, concerned that cutting-edge semiconductors might also find their way from Abu Dhabi to Beijing, rebuffed them. The Trump administration did not.

About two months after President Donald Trump’s inauguration early last year, the U.A.E. promised to invest $1.4 trillion in the U.S. over a 10-year period. During those talks, Trump met personally with Sheikh Tahnoon Bin Zayed Al Nahyan. Sheikh Tahnoon plays formidable commercial and political roles in the UAE. He is the president’s brother; oversees one of the world’s largest sovereign wealth funds; is chairman of two AI companies (MGX and G42), and supervises the country’s intelligence apparatus as its national security adviser.

By May, the White House had kicked off negotiations with the U.A.E. to ease semiconductor restrictions. The number of chips shipped annually to the U.A.E. would quintuple, with a portion destined for G42 (which had business relationships with Chinese tech companies). A cohort of senior U.S. officials opposed the deal, according to subsequent reporting from the New York Times.

"What most disturbed these dissenting officials was that the White House was asking so little from Sheikh Tahnoon," the Times reported. "They had hoped for an upfront guarantee that the Emirates would cancel military exercises with China or stop sharing technology with Chinese companies."

A deal, including advanced chips, was sealed in November.

Perhaps the UAE’s $1.4 trillion pledge was responsible for getting it done. Perhaps Sheikh Tahnoon’s decision to have his company, MGX, partner last May with the Trump family’s cryptocurrency enterprise, World Liberty Financial, played a part. As Bloomberg News reported, MGX used a World Liberty stablecoin to fund a $2 billion investment in Binance, a crypto exchange that had previously run afoul of U.S. anti-money laundering laws. Or perhaps the UAE’s hefty investment in a firm founded by Trump’s son-in-law, Jared Kushner, made a difference.

Any or those factors may explain why Trump cut such a cozy and reckless deal with Sheikh Tahnoon and the UAE. But The Wall Street Journal’s entry in that particular debate over this past weekend may be the winner.

The Journal reported on Saturday that just days before Trump’s inauguration, an enterprise backed by Sheikh Tahnoon secretly agreed to pay $500 million for a 49% stake in World Liberty. Trump’s son, Eric, signed the deal, two of Sheikh Tahnoon’s deputies joined World Liberty’s board, and the Trumps got about $187 million from the transaction. The Journal said that at least $31 million was designated for entities tied to the family of Steve Witkoff, a World Liberty co-founder. Witkoff — whose son, Zach, also co-founded World Liberty — is now Trump’s special envoy to the Middle East.

Representatives for Tahnoon said Trump played no role in the previously undisclosed transaction. A World Liberty spokesman also said that Trump and Witkoff weren’t involved and told the Journal that the company was being held to an unfair standard that was "ridiculous and un-American." If policing raw financial conflicts of interest and possible grifting by Trump and his family is now un-American, then he has a point.

"President Trump only acts in the best interests of the American public," a White House spokeswoman told the Journal, while noting that his children oversee his assets. "There are no conflicts of interest." She added that Witkoff is working to "advance President Trump's goals of peace around the world."

A White House counsel also weighed in, telling the Journal that Trump is not involved in any business transactions that "would implicate his constitutional responsibilities."

Color me skeptical that no conflicts of interest cling to this mess or that Trump isn’t compromising his constitutional responsibilities. Conflicts of interest are rampant in the money grabs gilding the U.S. and UAE’s chip deals. And safeguarding U.S. national security is one of the presidency’s primary mandates. It’s one reason why the U.S. Constitution grants the executive branch so much latitude in foreign affairs.

The U.S. and China are in a footrace for technological dominance that has economic and military consequences. Undermining U.S. competitiveness in exchange for massive paydays crafted in the shadows is wildly irresponsible and dangerous — and puts the well-being of average Americans and the American experiment at risk.

The framers of the Constitution were realists. They added "emoluments" clauses forbidding the president and other federal officials from accepting gifts, payments, or titles from foreign governments. "Emoluments" is just an 18th century word for "bribe" and the framers knew that bribes compromised good, ethical governance.

They also decided, however, that conflict-of-interest rules shouldn’t be strictly applied to presidents because they would hamstring their ability to do their jobs well. So an honor code has governed how presidents in the modern era conduct their affairs from the Oval Office.

In his first term and now in his second, Trump has routinely made end-runs around disclosure and conflicts-of-interest practices that his predecessors all observed. His family business has done quite well along the way. The reputations of the presidency and America, as well as sound policymaking, have suffered.

"President Trump has been completely transparent when his family travels for business reasons. They don't do so in secret," said Deputy Attorney General Todd Blanche, when ABC News asked him on Sunday about Trump’s U.A.E. deals. "There's nothing unprecedented about the Trump Organization going out and trying to make investments that basically all will come back to the American people and jobs in this country. And so this idea that there's something untoward or unprecedented is just a repeated story that isn't true."

It's absolutely true that Trump has hung a for-sale sign on the Oval Office at a scale and frequency that is untoward and unprecedented. It’s also true that a Republican-controlled Congress and the courts are unlikely to do a thing about it.

This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Timothy L. O’Brien is senior executive editor of Bloomberg Opinion. A former editor and reporter for the New York Times, he is author of "TrumpNation: The Art of Being the Donald."