Why a Trade War With China Isn’t ‘Easy to Win’ (Slightly Wonkish)

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By Paul Krugman

Opinion Columnist

• May 22, 2018

At this point, it’s looking as if Trump’s tough talk on China trade will turn out to be as empty as his tough talk on, say drug prices. Faced with the prospect of actually going toe to toe with powerful interests – as opposed to doing harm to desperate immigrants, poor people who need health care, etc. – Trump keeps backing down, ignominiously. But what happened to all that bluster about trade wars being “good, and easy to win”?

I can think of four reasons Trump ran away:

1. Someone actually managed to explain the economics to him, and he realized that the trade war wasn’t actually a good idea

2. He just lost his nerve, as he consistently does when confronting people who aren’t powerless

3. He was bribed, with China offering sweet deals to his personal business interests

4. The Chinese also have some kind of tape

It tells you a lot about the state of American leadership that (1) is highly implausible, while 2-4 all seem quite possible. And this means that what I’m about to say may amount to overthinking the issue.

Still, I think there are some good reasons why even a crude mercantilist looking at the China situation might conclude that this particular trade war isn’t nearly as easy to win as it might appear at first glance.

On the surface, the U.S. would appear to very much have the upper hand in any trade confrontation. After all, last year we only sold China $130 billion in goods, while they sent us $500 billion. So they have a lot more to lose, right?

Well, it’s not as clear as all that. You need to look at the realities of modern trade. And when you do, the story looks quite different. It goes without saying that Trump is wrong about the economics of bilateral trade imbalances. But he’s also wrong about the political economy, which isn’t the same thing.

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President Trump and President Xi Jinping of China shake hands after making joint statements in Beijing, in Nov. 2017.CreditDamir Sagolj/Reuters

Admittedly, the political economy of trade is kind of mercantilist, because it’s driven largely by producer interests. Long ago I wrote about “GATT-think”, the view of trade, enshrined in international negotiations, that sees exports as good, imports as bad, so that letting someone sell us stuff, even if it’s better and cheaper than we could make ourselves, is a “concession.” The genius of the postwar international trading system was that it harnessed this special-interest reality, using the ambitions of exporters to offset the protectionism of those competing with imports, to engineer a kind of enlightened mercantilism that vastly expanded world trade.

But GATT-think needs some modifying in an era of complex international value chains. Even if producer interests predominate over consumer interests, what producers should care about is not how much they export but how much income they derive from exporting. That is, they should care about “income at risk,” not “exports at risk.” These numbers can be very different, and in the case of US-China trade they are.

Consider the over-used but still illuminating case of the iPhone, which is assembled in China out of components made all over the world. That final assembly accounts for only 3 to 6 percent of the manufacturing cost, but the whole price of an iPhone shipped from China to America is counted as a Chinese export. If I’m doing the numbers right, this means that China exports around $17 billion worth of iPhones to America each year, but Chinese producers account for only around $1 billion of that.

Smartphones are an extreme case, but there’s a lot of that sort of thing. The income China derives from exports to the US is probably not much more than half the face value of those exports. There’s a bit of the same thing going on in the other direction – US aircraft, for example, contain quite a few foreign components – but it’s much less extreme.

What this means, in turn, is that even if we only focus on narrow producer interests – even if we take a mercantilist view – US-China trade is a lot less lopsided than it seems, which in turn means that the pain from a trade war would be a lot less asymmetric than the raw trade numbers might suggest.

But wait, there’s more. Apple sells those iPhones for considerably more than it costs to import them from China. This adds a whole additional chunk of US income at risk to the bilateral trade relationship. True, given time Apple could probably find other suppliers – but not right away, and not easily. Foxconn wasn’t built in a day.

Overall, it’s still probably true that China would be hurt worse than the U.S. in an all-out trade war. But the pain wouldn’t be at all one-sided. And it’s possible, I guess, that Trump dimly recognized that reality, or at least noticed that his beloved stock market really doesn’t like trade war talk.

Actually, I’m still betting that it’s a bribe and/or some kind of tape. But worth talking through, anyway.

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NYT

Trump Demands Inquiry Into Whether Justice Dept. ‘Infiltrated or Surveilled’ His Campaign

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In a series of tweets on Sunday morning, President Trump repeated suggestions that the special counsel investigation was a partisan exercise seeking to undermine Republican prospects in the midterm elections.CreditAl Drago for The New York Times

By Julie Hirschfeld Davis and Adam Goldman

May 20, 2018

WASHINGTON — President Trump on Sunday demanded that the Justice Department investigate whether the department or the F.B.I. “infiltrated or surveilled” his campaign at the behest of the Obama administration, following through on his frequent threats to intervene in the special counsel inquiry as he targets those he views as political enemies.

Mr. Trump made the order on Twitter during a day of public venting about the special counsel investigation, which he charged had turned up no evidence of collusion with Russia and was now casting a worldwide net so that it could harm Republicans’ chances in midterm congressional elections this fall.

But in ordering up a new inquiry, Mr. Trump went beyond his usual tactics of suggesting wrongdoing and political bias by those investigating him, and crossed over into applying overt presidential pressure on the Justice Department to do his bidding, an extraordinary realm where past presidents have hesitated to tread.

“I hereby demand, and will do so officially tomorrow, that the Department of Justice look into whether or not the FBI/DOJ infiltrated or surveilled the Trump Campaign for Political Purposes,” Mr. Trump tweeted on Sunday afternoon, “and if any such demands or requests were made by people within the Obama Administration!”

Legal experts said such a presidential intervention had little precedent, and could force a clash between the sitting president and his Justice Department that would be reminiscent of the one surrounding Richard M. Nixon during Watergate, when a string of top officials resigned rather than carry out his order to fire a special prosecutor investigating him.

In response to Mr. Trump’s post, the Justice Department asked its internal watchdog, the Office of the Inspector General, to expand its current inquiry into the surveillance of a former Trump campaign official to include the questions raised by the president.

“If anyone did infiltrate or surveil participants in a presidential campaign for inappropriate purposes, we need to know about it and take appropriate action,” Rod J. Rosenstein, the deputy attorney general who is overseeing the Russia inquiry, said in a statement.

By handing the question to the inspector general, Mr. Rosenstein appeared to be trying to thread the needle, giving the president what he said he wanted without fully bowing to his demands.

But it was not clear whether that would satisfy Mr. Trump, who in February complained that it was “disgraceful” for the Justice Department to hand over the surveillance investigation to an inspector general who lacks prosecutorial power, saying it would “take forever” and suggesting that he was “an Obama guy.”

The president’s call came two weeks after he publicly expressed frustration with the Justice Department for failing to give Republican lawmakers documents they are seeking about the basis and findings of the special counsel investigation into whether the Trump campaign worked with the Russians to sway the 2016 election. The president said then that “at some point, I will have no choice but to use the powers granted to the Presidency and get involved!”

That point appeared to be Sunday, close to the first anniversary of the opening of the special counsel investigation, at a time when the president’s frustration about it has reached a fever pitch and he and his allies have ratcheted up their efforts to undercut its credibility. It came as Rudolph W. Giuliani, his private lawyer, said that the special counsel, Robert S. Mueller III, planned to complete by Sept. 1 his inquiry into whether the president had obstructed justice — an apparent attempt by Mr. Giuliani to publicly pressure the special counsel amid negotiations over whether Mr. Trump will be interviewed in the case.

While most presidents who have faced investigations have responded with increased discretion to avoid being seen as trying to influence the outcome, Mr. Trump has dispensed with any notion that he is not trying to do so. He and his aides have branded the investigation a witch hunt and a hoax, called for an end to it, and tried to set its boundaries, and now the president has ordered a review of how it was handled.

“I can’t think of a prior example of a sitting president ordering the Justice Department to conduct an investigation like this one,” said Stephen I. Vladeck, a professor at the University of Texas School of Law. “That’s little more than a transparent effort to undermine an ongoing investigation.”

If Mr. Trump were to follow through with the demand, Mr. Vladeck added, “it seems to me that the recipients of such an order should resign — and that we’re heading for another Saturday Night Massacre.”

Mr. Trump’s directive prompted speculation that he might be trying to push Mr. Rosenstein out of his job without explicitly firing him, a move the president has frequently considered. Mr. Rosenstein pushed back this month against Republican demands for more visibility into the special counsel’s inquiry, saying his department “is not going to be extorted.”

“This demand puts DAG Rod Rosenstein in a difficult position,” Barbara L. McQuade, a former United States attorney in Michigan, said in a post on Twitter. “He can’t open an investigation based on a political demand, but if he refuses and is fired or resigns, he loses control of the Mueller investigation. Maybe just what Trump wants.”

Among the material Mr. Trump and congressional Republicans are demanding are documents related to an F.B.I. informant who was sent to talk to three Trump campaign aides.

The president alleged on Friday that the informant had been a spy dispatched to infiltrate his campaign for political purposes. In fact, F.B.I. agents sent the informant to contact Mr. Trump’s campaign advisers only after receiving evidence that the pair had suspicious contacts linked to Russia.

Mr. Trump began the day railing about the scope of Mr. Mueller’s investigation. In a series of morning tweets that has become a weekend ritual for the president, Mr. Trump pointed to a New York Times report that detailed how the special counsel is examining whether Saudi Arabia and the United Arab Emirates offered help to the Trump campaign, and whether they coordinated with Russia in doing so.

“Things are really getting ridiculous,” Mr. Trump wrote on Twitter. “The Failing and Crooked (but not as Crooked as Hillary Clinton) @nytimes has done a long & boring story indicating that the World’s most expensive Witch Hunt has found nothing on Russia & me so now they are looking at the rest of the World!”

The president did not challenge the accuracy of The Times’s account, which was the first indication that countries other than Russia may have offered assistance to his campaign in the months before the presidential election. But he suggested that the breadth of the inquiry was proof that Mr. Mueller’s investigation was a partisan exercise geared toward harming Republican congressional candidates.

“Now that the Witch Hunt has given up on Russia and is looking at the rest of the World, they should easily be able to take it into the Mid-Term Elections where they can put some hurt on the Republican Party,” Mr. Trump said. “Don’t worry about Dems FISA Abuse, missing Emails or Fraudulent Dossier!”

Mr. Trump was alluding to his contention that a Foreign Intelligence Surveillance Court warrant that was granted to look at Carter Page, one of his campaign associates, was improperly obtained and based on false information provided by his political opponents, including a dossier that included salacious information about him.

Under pressure from Mr. Trump and his Republican allies in Congress, the Justice Department said in March that it would begin an investigation into the surveillance of Mr. Page. Law enforcement officials had long had concerns that Mr. Page, a former investment banker based in Moscow, was acting as a Russian agent.

But the president has continued to make the allegation that the court-ordered surveillance of Mr. Page was unjustified. Mr. Trump has also continued to claim that the special counsel should be looking not at his campaign, but instead at his 2016 rival, Hillary Clinton.

“At what point does this soon to be $20,000,000 Witch Hunt, composed of 13 Angry and Heavily Conflicted Democrats and two people who have worked for Obama for 8 years, STOP!” Mr. Trump wrote in a pair of tweets. “They have found no Collussion with Russia, No Obstruction, but they aren’t looking at the corruption in the Hillary Clinton Campaign where she deleted 33,000 Emails, got $145,000,000 while Secretary of State, paid McCabes wife $700,000 (and got off the FBI hook along with Terry M) and so much more.”

It was not clear where Mr. Trump’s estimate of the cost of Mr. Mueller’s inquiry came from. The Justice Department reported at the end of last year that the special counsel’s investigation had incurred at least $6.7 million in expenses in its first four and a half months, and Mr. Trump’s own budget allocated $10 million for his office for 2019.

The president has often charged that Mr. Mueller is leading a team of Democratic activists who are out to get him, citing reports that some of his investigators are Democrats who supported Mrs. Clinton. He has also sought to discredit Andrew G. McCabe, the former deputy F.B.I. director, by noting that his wife ran as a Democrat for political office in Virginia with support and campaign donations from Terry McAuliffe, a close Clinton ally.

But Mr. Mueller himself is a Republican, as are several members of his staff, and the investigation is being overseen by Mr. Rosenstein, another Republican, who was Mr. Trump’s own choice to be deputy attorney general.

That did not stop the president from suggesting that the investigation was politically driven and should end.

“Republicans and real Americans should start getting tough on this Scam,” he tweeted on Sunday.

Katie Benner contributed reporting.

NYT

Mueller Plans to Wrap Up Obstruction Inquiry Into Trump by Sept. 1, Giuliani Says

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Rudolph W. Giuliani, one of President Trump’s personal lawyers, said that investigators have told him that the special counsel wants to wrap up the obstruction portion of his broader Russia investigation by Sept. 1.CreditTasos Katopodis/Getty Images

By Michael S. Schmidt and Maggie Haberman

May 20, 2018

WASHINGTON — The special counsel plans to finish by Sept. 1 its investigation into whether President Trump obstructed the Russia inquiry, according to the president’s lawyer Rudolph W. Giuliani, who said on Sunday that waiting any longer would risk improperly influencing voters in the midterm elections in November.

The office of the special counsel, Robert S. Mueller III, shared its timeline about two weeks ago amid negotiations over whether Mr. Trump will be questioned by investigators, Mr. Giuliani said, adding that Mr. Mueller’s office said the date was contingent on Mr. Trump agreeing to be interviewed. A spokesman for the special counsel’s office declined to comment.

Mr. Giuliani’s comments were an apparent attempt to publicly pressure Mr. Mueller amid their interview negotiations. He urged that the investigation be wrapped up as soon as possible, pointing as a cautionary tale to the revelation by the former F.B.I. director James B. Comey in the last days of the 2016 presidential race that he was reopening the investigation into Hillary Clinton’s use of a private email server. Mr. Comey’s announcement is widely blamed by Democrats for costing her the election. The F.B.I. found no wrongdoing.

“You don’t want another repeat of the 2016 election where you get contrary reports at the end and you don’t know how it affected the election,” Mr. Giuliani said.

Handing in a report to the Justice Department on his findings in the obstruction case would not signal the end of Mr. Mueller’s work. The obstruction examination is one piece of Mr. Mueller’s broader inquiry, a counterintelligence investigation into Russia’s campaign to interfere in the 2016 presidential election. Counterintelligence investigations are used to gather information quietly about the activities of foreign powers and their agents — sometimes for years — and can result in criminal charges.

Mr. Giuliani sought to frame the outcome of the obstruction investigation as pitting the credibility of one man against another: Mr. Trump vs. Mr. Comey. The president asked Mr. Comey in the early days of the administration to end the investigation into his first national security adviser, Michael T. Flynn, according to contemporaneous memos and congressional testimony by Mr. Comey. The president’s request is one of the main episodes Mr. Mueller is examining to determine whether Mr. Trump had criminal intent to obstruct the Russia investigation.

“We want the concentration of this to be on Comey versus the president’s credibility, and I think we win that and people get that,” Mr. Giuliani said, adding that he also hoped that the Justice Department would open a criminal investigation into Mr. Comey for perjury and for his role in the sharing of information cited in New York Times reports last year about his encounters with the president that prompted Mr. Mueller’s appointment.

The president, Mr. Giuliani said, wants the report to be made public. His comments echoed tweets by Mr. Trump hours earlier, when he complained that a prolonged inquiry would hurt Republicans in the midterms.

Mr. Giuliani said that he and Mr. Mueller’s office were still hammering out the terms of an interview with the president. He portrayed his client as a willing interview subject, saying that in the president’s view, no evidence exists that his associates coordinated with Russia’s election interference.

Mr. Giuliani said that an interview would be a distraction for the president and that the amount of preparation required meant that the president could not sit for questioning until after the scheduled summit meeting between Mr. Trump and the North Korean leader, Kim Jong-un, on June 12 in Singapore. Based on that schedule, Mr. Giuliani said, the president could be questioned around Independence Day.

NYT

Trump Jr. and Other Aides Met With Gulf Emissary Offering Help to Win Election

Trump Jr. and Other Aides Met With Gulf Emissary Offering Help to Win Election

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Donald Trump Jr. met in Trump Tower in the summer of 2016 with a representative of two wealthy Arab princes who said they were eager to help his father win election.CreditHiroko Masuike/The New York Times

By Mark Mazzetti, Ronen Bergman and David D. Kirkpatrick

May 19, 2018

WASHINGTON — Three months before the 2016 election, a small group gathered at Trump Tower to meet with Donald Trump Jr., the president’s eldest son. One was an Israeli specialist in social media manipulation. Another was an emissary for two wealthy Arab princes. The third was a Republican donor with a controversial past in the Middle East as a private security contractor.

The meeting was convened primarily to offer help to the Trump team, and it forged relationships between the men and Trump insiders that would develop over the coming months — past the election and well into President Trump’s first year in office, according to several people with knowledge of their encounters.

Erik Prince, the private security contractor and the former head of Blackwater, arranged the meeting, which took place on Aug. 3, 2016. The emissary, George Nader, told Donald Trump Jr. that the princes who led Saudi Arabia and the United Arab Emirates were eager to help his father win election as president. The social media specialist, Joel Zamel, extolled his company’s ability to give an edge to a political campaign; by that time, the firm had already drawn up a multimillion-dollar proposal for a social media manipulation effort to help elect Mr. Trump.

The company, which employed several Israeli former intelligence officers, specialized in collecting information and shaping opinion through social media.

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Donald Trump Jr. was said to respond approvingly to a proposal for a social media manipulation effort to help elect his father as president.CreditDamon Winter/The New York Times

It is unclear whether such a proposal was executed, and the details of who commissioned it remain in dispute. But Donald Trump Jr. responded approvingly, according to a person with knowledge of the meeting, and after those initial offers of help, Mr. Nader was quickly embraced as a close ally by Trump campaign advisers — meeting frequently with Jared Kushner, Mr. Trump’s son-in-law, and Michael T. Flynn, who became the president’s first national security adviser. At the time, Mr. Nader was also promoting a secret plan to use private contractors to destabilize Iran, the regional nemesis of Saudi Arabia and the Emirates.

After Mr. Trump was elected, Mr. Nader paid Mr. Zamel a large sum of money, described by one associate as up to $2 million. There are conflicting accounts of the reason for the payment, but among other things, a company linked to Mr. Zamel provided Mr. Nader with an elaborate presentation about the significance of social media campaigning to Mr. Trump’s victory.

The meetings, which have not been reported previously, are the first indication that countries other than Russia may have offered assistance to the Trump campaign in the months before the presidential election. The interactions are a focus of the investigation by Robert S. Mueller III, the special counsel, who was originally tasked with examining possible Trump campaign coordination with Russia in the election.

Mr. Nader is cooperating with the inquiry, and investigators have questioned numerous witnesses in Washington, New York, Atlanta, Tel Aviv and elsewhere about what foreign help may have been pledged or accepted, and about whether any such assistance was coordinated with Russia, according to witnesses and others with knowledge of the interviews.

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Erik D. Prince, the founder of Blackwater, arranged the meeting with Donald Trump Jr., George Nader and Joel Zamel.CreditAndrew Harrer/Bloomberg News

The interviews, some in recent weeks, are further evidence that special counsel’s investigation remains in an intense phase even as Mr. Trump’s lawyers are publicly calling for Mr. Mueller to bring it to a close.

It is illegal for foreign governments or individuals to be involved in American elections, and it is unclear what — if any — direct assistance Saudi Arabia and the Emirates may have provided. But two people familiar with the meetings said that Trump campaign officials did not appear bothered by the idea of cooperation with foreigners.

A lawyer for Donald Trump Jr., Alan Futerfas, said in a statement that “prior to the 2016 election, Donald Trump Jr. recalls a meeting with Erik Prince, George Nader and another individual who may be Joel Zamel. They pitched Mr. Trump Jr. on a social media platform or marketing strategy. He was not interested and that was the end of it.”

The August 2016 meeting has echoes of another Trump Tower meeting two months earlier, also under scrutiny by the special counsel, when Donald Trump Jr. and other top campaign aides met with a Russian lawyer after being promised damaging information about Hillary Clinton. No evidence has emerged suggesting that the August meeting was set up with a similar premise.

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Stephen Miller, a senior aide to President Trump, was in Donald Trump Jr.’s office when the others arrived for the meeting.CreditShawn Thew/EPA, via Shutterstock

The revelations about the meetings come in the midst of new scrutiny about ties between Mr. Trump’s advisers and at least three wealthy Persian Gulf states. Besides his interest in Saudi Arabia and the Emirates, Mr. Mueller has also been asking witnesses about meetings between White House advisers and representatives of Qatar, Saudi Arabia’s bitter rival.

A lawyer for Mr. Zamel denied that his client had carried out any campaign on Mr. Trump’s behalf. “Neither Joel Zamel, nor any of his related entities, had any involvement whatsoever in the U.S. election campaign,” said the lawyer, Marc L. Mukasey.

“The D.O.J. clarified from Day 1 that Joel and his companies have never been a target of the investigation. My client provided full cooperation to the government to assist with their investigation,” he said.

Kathryn Ruemmler, a lawyer for Mr. Nader, said, “Mr. Nader has fully cooperated with the special counsel’s investigation and will continue to do so.” A senior official in Saudi Arabia said it had never employed Mr. Nader in any capacity or authorized him to speak for the crown prince.

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Mr. Trump has allied himself with the Emirati crown prince, Sheikh Mohammed bin Zayed al-Nahyan, endorsing his strong support for Saudi Arabia and confrontational approaches toward Iran and Qatar.CreditAl Drago for The New York Times

Mr. Prince, through a spokesman, declined to comment. The White House did not respond to a request for comment.

Advisers to the Court

Crown Prince Mohammed bin Zayed al-Nahyan of Abu Dhabi, the de facto ruler of the United Arab Emirates, and Crown Prince Mohammed bin Salman of Saudi Arabia, the king’s main adviser, had long opposed many of the Obama administration’s policies toward the Middle East. They resented President Barack Obama’s agreement with Iran over its nuclear program, his statements of support for the Arab Spring uprisings and his hands-off approach to the Syrian civil war.

News outlets linked to Saudi Arabia and the United Arab Emirates fiercely criticized Mrs. Clinton, Mr. Trump’s Democratic opponent, when she was secretary of state, and diplomats familiar with their thinking say both princes hoped for a president who would take a stronger hand in the region against both Iran and groups like the Muslim Brotherhood.

Mr. Nader had worked for years as a close adviser to Crown Prince Mohammed of Abu Dhabi, and Mr. Zamel had worked for the Emirati royal court as a consultant as well. When Mr. Trump locked up the Republican presidential nomination in early 2016, Mr. Nader began making inquiries on behalf of the Emirati prince about possible ways to directly support Mr. Trump, according to three people with whom Mr. Nader discussed his efforts.

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One of Mr. Zamel’s firms did work for Oleg V. Deripaska, an aluminum magnate, who has been linked to President Vladimir V. Putin of Russia.CreditSergei Karpukhin/Reuters

Mr. Nader also visited Moscow at least twice during the presidential campaign as a confidential emissary from Crown Prince Mohammed of Abu Dhabi, according to people familiar with his travels. After the election, he worked with the crown prince to arrange a meeting in the Seychelles between Mr. Prince and a financier close to President Vladimir V. Putin of Russia.

Companies connected to Mr. Zamel also have ties to Russia. One of his firms had previously worked for oligarchs linked to Mr. Putin, including Oleg V. Deripaska and Dmitry Rybolovlev, who hired the firm for online campaigns against their business rivals.

Mr. Deripaska, an aluminum magnate, was once in business with the former Trump campaign chairman Paul Manafort, who has pleaded not guilty in the special counsel investigation to charges of financial crimes and failing to disclose the lobbying work he did on behalf of a former president of Ukraine, an ally of Mr. Putin. Mr. Rybolovlev once purchased a Florida mansion from Mr. Trump.

Mr. Nader’s visits to Russia and the work Mr. Zamel’s companies did for the Russians have both been a subject of interest to the special counsel’s investigators, according to people familiar with witness interviews.

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Mr. Prince has known Mr. Nader since he worked for Blackwater in Iraq.CreditZach Gibson for The New York Times

A String of Meetings

Mr. Zamel and Mr. Nader were together at a Midtown Manhattan hotel at about 4 p.m. on the afternoon of Aug. 3 when Mr. Nader received a call from Mr. Prince summoning them to Trump Tower. When they arrived, Stephen Miller, a top campaign aide who is now a White House adviser, was in Donald Trump Jr.’s office as well, according to the people familiar with the meeting.

Mr. Prince is a longtime Republican donor and the brother of Betsy DeVos, the education secretary, and Mr. Prince and Mr. Nader had known each other since Mr. Nader had worked for Blackwater as a business agent in Iraq in the years after the American invasion. Mr. Prince has longstanding ties to the Emirates, and has frequently done business with Crown Prince Mohammed.

Mr. Prince opened the meeting by telling Donald Trump Jr. that “we are working hard for your father,” in reference to his family and other donors, according to a person familiar with the meeting. He then introduced Mr. Nader as an old friend with deep ties to Arab leaders.

Mr. Nader repeatedly referred to the Saudi and Emirati princes as “my friends,” according to one person with knowledge of the conversation. To underscore the point, he would open his mobile phone to show off pictures of him posing with them, some of which The New York Times obtained.

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George Nader in 1999. He is an adviser to the Emiratis who is cooperating in the special counsel investigation.CreditRon Sachs/Picture-Alliance, via Associated Press

Mr. Nader explained to Donald Trump Jr. that the two princes saw the elder Mr. Trump as a strong leader who would fill the power vacuum that they believed Mr. Obama had left in the Middle East, and Mr. Nader went on to say that he and his friends would be glad to support Mr. Trump as much as they could, according to the person with knowledge of the conversation.

Mr. Zamel, for his part, laid out the capabilities of his online media company, although it is unclear whether he referred to the proposals his company had already prepared. One person familiar with the meeting said that Mr. Nader invited Donald Trump Jr. to meet with a Saudi prince — an invitation the younger Mr. Trump declined. After about half an hour, everyone exchanged business cards.

“There was a brief meeting, nothing concrete was offered or pitched to anyone and nothing came of it,” said Mr. Mukasey, the lawyer for Mr. Zamel.

By then, a company connected to Mr. Zamel had been working on a proposal for a covert multimillion-dollar online manipulation campaign to help elect Mr. Trump, according to three people involved and a fourth briefed on the effort. The plan involved using thousands of fake social media accounts to promote Mr. Trump’s candidacy on platforms like Facebook.

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Mr. Nader and Crown Prince Mohammed bin Salman of Saudi Arabia in a photograph obtained by The New York Times.Credit.

There were concerns inside the company, Psy-Group, about the plan’s legality, according to one person familiar with the effort. The company, whose motto is “shape reality,” consulted an American law firm, and was told that it would be illegal if any non-Americans were involved in the effort.

Mr. Zamel, the founder of Psy-Group and one of its owners, has been questioned about the August 2016 meeting by investigators for the special counsel, and at least two F.B.I. agents working on the inquiry have traveled to Israel to interview employees of the company who worked on the proposal.

According to one person, the special counsel’s team has worked with the Israeli police to seize the computers of one of Mr. Zamel’s companies, which is currently in liquidation.

In the hectic final weeks of the campaign and during the presidential transition, several of Mr. Trump’s advisers drew Mr. Nader close. He met often with Mr. Kushner, Mr. Flynn and Stephen K. Bannon, who took over as campaign chairman after Mr. Manafort resigned amid revelations about his work in Ukraine.

In December 2016, Mr. Nader turned again to an internet company linked to Mr. Zamel — WhiteKnight, based in the Philippines — to purchase a presentation demonstrating the impact of social media campaigns on Mr. Trump’s electoral victory. Asked about the purchase, a representative of WhiteKnight said: “WhiteKnight delivers premium research and high-end business development services for prestigious clients around the world. WhiteKnight does not talk about any of its clients.”

After the inauguration, both Mr. Zamel and Mr. Nader visited the White House, meeting with Mr. Kushner and Mr. Bannon.

At that time, Mr. Nader was promoting a plan to use private contractors to carry out economic sabotage against Iran that, he hoped, might coerce it to permanently abandon its nuclear program. The plan included efforts to deter Western companies from investing in Iran, and operations to sow mistrust among Iranian officials. He advocated the project, which he estimated would cost about $300 million, to American, Emirati and Saudi officials.

Last spring, Mr. Nader traveled to Riyadh for meetings with senior Saudi military and intelligence officials to pitch his Iran sabotage plan. He was convinced, according to several people familiar with his plan, that economic warfare was the key to the overthrow of the government in Tehran. One person briefed on Mr. Nader’s activities said he tried to persuade Mr. Kushner to endorse the plan to Crown Prince Mohammed in person on a trip to Riyadh, although it was unclear whether the message was delivered.

Asked about Mr. Nader’s plans to attack Iran, the senior Saudi official said Mr. Nader had a habit of pitching proposals that went nowhere.

Mr. Nader was also in discussions with Mr. Prince, the former head of Blackwater, about a plan to get the Saudis to pay $2 billion to set up a private army to combat Iranian proxy forces in Yemen.

Since entering the White House, Mr. Trump has allied himself closely with Saudi Arabia and the Emirates. His first overseas trip was to Riyadh. He strongly backed Saudi and Emirati efforts to isolate their neighbor Qatar, another American ally, even over apparent disagreement from the State and Defense Departments.

This month, Mr. Trump also withdrew from an Obama administration nuclear deal with Iran that both Saudi Arabia and the United Arab Emirates had campaigned against for years, delivering them their biggest victory yet from his administration.

Mark Mazzetti reported from Washington, Ronen Bergman from Tel Aviv and David D. Kirkpatrick
from London. Maggie Haberman contributed reporting.

A version of this article appears in print on , on Page A1 of the New York edition with the headline: Trump Inquiry Grows to Include Contacts in Gulf. Order Reprints | Today’s Paper | Subscribe

NYT

Former Playboy Model and Son, 7, Die in Plunge From Manhattan Hotel

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Tommy Ng, deputy inspector of Fifth Police Precinct, at the Gotham Hotel.CreditChang W. Lee/The New York Times

By Al Baker and Nikita Stewart

May 18, 2018

The first 911 callers early on Friday reported seeing people fall from high up in the Gotham Hotel in Midtown Manhattan. A man would later tell detectives that he heard two crashing sounds — one after another — and followed them to the shattered bodies of a woman and a boy on the hotel’s second-story landing.

“He heard two loud noises and his attention was drawn to that, and he discovered these two deceased individuals,” Assistant Chief William Aubry, commander of Manhattan South detectives, said at a news conference.

Investigators soon learned that the woman was 47-year-old Stephanie Nicolai, a former Playboy model and author who had been enmeshed in a custody dispute over the child found dead at her side: her 7-year-old son, Vincent.

As the police began an investigation into the deaths, searching for witnesses and seeking video evidence to help piece together the events, they said that no assailants were being sought.

But one of the emerging theories was that Ms. Nicolai “may have pushed the son off first and then jumped,” said a law enforcement official who spoke on the condition of anonymity to discuss an ongoing investigation. Beyond the fact that the bodies seemed to have fallen separately, the official said, a “high railing” — perhaps somewhat of an impediment to a young boy acting alone — had to be surmounted before the fall.

The deaths occurred at about 8:15 a.m., Chief Aubry said, at a hotel that describes itself as a “boutique” destination with “67 spacious suites and hotel rooms with balconies across 25 floors,” and a Wolfgang’s Steakhouse embedded as a commercial anchor.

Indeed, as investigators and reporters clogged the sidewalk outside the high-rise hotel on East 46th Street, between Madison and Fifth Avenues, passers-by, including employees of nearby businesses, thought a celebrity had been sighted. Many expressed shock and sadness to learn that the attention was over the death of a woman and her son.

By early afternoon, no suicide note had been discovered, the police said. And a motive for the deaths was still being investigated, said the law enforcement official. Yet details about the victims’ past began coming into focus.

Raoul Lionel Felder, a former lawyer for the woman — whom he referred to as Stephanie Adams, the name she used in her November 1992 Playboy appearance — said he last spoke with her about three months ago, and was concerned about her mental health.

“She talked about leaving the country,” Mr. Felder said.

He said that a judge recently told her she could not take her son to Europe, as she had wanted. According to the law enforcement official, it appeared that Ms. Nicolai had been asked on Thursday to relinquish her son’s passport.

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Stephanie Nicolai in 2006.CreditBrad Barket/Getty Images

Though Mr. Felder said he did not represent Ms. Nicolai in recent legal proceedings, he believed she had unrealistic expectations about her divorce and custody options.

“I felt she needed help in a different area,” Mr. Felder said. “I’d been her friend for 20 years.”

This week, Mr. Felder said, a notice came addressed to him and his former client from the city’s child welfare agency. It appeared that she had made an inquiry with the agency to see if there were any open investigations, he said, but there were none. Such inquiries to the agency, the Administration for Children’s Services, are common in contentious divorces where a parent makes a claim against another.

Sanford A. Rubenstein, a lawyer who represented Ms. Nicolai in a case against the Police Department, recalled how a civil jury in Manhattan ruled in 2012 that she had been the victim of excessive force and awarded her $1.2 million — a sum a judge later reduced around $400,000. Four years later, Mr. Rubenstein said, the Police Department granted her a gun permit after initially denying it.

“She had felt at the time that the actions of the police were in part as a result of her being successful in the lawsuit against them,” Mr. Rubenstein said. He said she called him often as recently as “a few months ago,” to speak about her businesses or “the matrimonial matter or the custody matter” that she was confronting. He said he believed she was separated from her husband.

“She really loved that boy,” Mr. Rubenstein said of the 7-year-old. “During the trial, she would bring the little boy with her to court every day and the judge gave her a separate room to sit in with the child. She was inseparable from that child.”

Chief Aubry said that the two had checked into the Gotham Hotel at about 6 p.m. on Thursday. They were given a suite on the 25th floor, and it did not appear anyone else had been staying in the room with them, the police said.

The deaths came about 14 hours later. Though the initial 911 callers said they believed someone had fallen, the police, in a flurry of follow-up radio communications, referred to the victims as jumpers — police jargon for those who commit suicide.

The mother and son were both clothed, the police said. After they fell, the two came to rest on the roof of the second-floor balcony in the hotel’s rear courtyard. No one on the balcony, or on the street below, was injured, the police said.

Reflecting on the loss, Mr. Felder said that the boy, whom he called “Vince,” was being home-schooled by his mother.

Inside his office, Mr. Felder said, is a hand-carved statue of Spiderman.

“He used to play with it,” Mr. Felder said of the boy, who would have turned 8 in June. “He was a very bright, smart boy. Cute. Cute as a button.”

Mr. Felder said he was in disbelief.

“At the end of the life, there’s a choice you can make, but how she could do this to her child?” he said. “She was more wrapped up than any mother I saw.

NYT