Las Vegas Sands Chairman Sheldon Adelson Told President Trump That China Trade War Could Cost Him Reelection
Posted on: September 23, 2019, 04:00h.
Last updated on: September 23, 2019, 10:52h.
Las Vegas Sands (NYSE:LVS) chairman and CEO Sheldon Adelson reportedly cautioned President Donald Trump that escalating the trade war with China could be detrimental to the US economy and hinder the president’s 2020 reelection bid.
Adelson and his wife, Miriam, are GOP mega-donors and supporters of the president. During the 2018 midterm election cycle, the Adelsons gave $123 million to Republican candidates and conservative groups throughout the country, more than any other donor.
On Aug. 20, the LVS chairman met with the president at the White House. Adelson, speaking on behalf of a broader group of US business leaders, reportedly told Trump that intensifying trade hostilities with China could negatively impact the US economy, The Wall Street Journal reports, citing two unidentified sources with knowledge of the meeting.
Three days later, Trump excoriated China and President Xi Jinping on Twitter, calling the Chinese leader an enemy of the US, a move that elicited a phone call from Adelson.
The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP,” said the president on Twitter. “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing .your companies HOME and making your products in the USA.”
Several days after the tweetstorm, Adelson reached out to Trump with what the Journal called a “more urgent message” from business leaders to reaffirm the casino magnate’s comments from the Aug. 20 White House meeting.
Skin In The Game
Adelson’s motivations for wanting cooler heads to prevail in the US/China trade war are clear. Las Vegas Sands operates five casinos in Macau, the lone Chinese territory where gambling is legal. Its stock is highly correlated to headlines related to the Special Administrative Region (SAR). Shares of LVS slid nearly 3% last month.
LVS has had a Macau footprint since 2002, and is now one of the peninsula’s dominant operators. The company generated nearly two-thirds of its 2018 revenue in Macau. US gaming companies in Macau, including Sands, face renewals of their licenses in 2022.
While analysts believe those permits will be renewed, LVS isn’t taking any chances, pledging to spend $2.2 billion to renovate its venues there and aid in the SAR’s quest to increase its convention and non-gaming tourism industries.
LVS owns the Parisian, Plaza, Parisian, Sands Cotai Central, and Sands Macau, and, in the eyes of some gaming industry observers, Adelson is viewed as the visionary that developed the modern day Cotai Strip.
Soon after Adelson’s call to Trump, US trade representative Robert Lighthizer said trade officials from the US and China had spoken by phone and were planning talks. The president has subsequently promised to delay some tariffs on Chinese goods.
In a sign that trade tensions between the world’s two largest economies may be cooling ahead of talks scheduled for October, the White House lifted tariffs on 400 Chinese products, while China has removed some levies on American products and has also promised to boost purchases from US farmers, long a sticking point for Trump in trade discussions.
It is not clear if Adelson’s prodding had anything to do with Trump’s more conciliatory tone in recent weeks, according to the Journal. LVS shares are up 2.18 percent this month.