Obama, Romney Debate Who Will be Tougher on China, Stronger on Trade
International trade, particularly with China, got an airing during the Oct. 22 Presidential debate, despite the much heavier emphasis on the Middle East and security concerns. President Barack Obama said the U.S. had boosted its exports to China and China's currency was at its most favorable level for the U.S. balance of trade in decades. Republican candidate Mitt Romney said China is in a "silent" trade war with the U.S. and he will label China a currency manipulator "on day one" of his presidency, which he said "allows us to apply tariffs where they're taking jobs."
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More generally, "we're going to increase our trade," Romney said. "Trade grows about 12 percent year. It doubles about every — every five or so years. We can do better than that, particularly in Latin America. The opportunities for us in Latin America we have just not taken advantage of fully. As a matter of fact, Latin America's economy is almost as big as the economy of China. We're all focused on China. Latin America is a huge opportunity for us — time zone, language opportunities."
Romney said "we can be a partner with China. We don't have to be an adversary in any way, shape or form. We can work with them, we can collaborate with them, if they're willing to be responsible." But he said "China has not played by the same rules, in part by holding down artificially the value of their currency. It holds down the prices of their goods. It means our goods aren't as competitive and we lose jobs. That's got to end."
In response to the moderator's question about whether Romney was "just going to start a trade war with China on day one?" Romney said China sells us much more than we sell it, "so it's pretty clear who doesn't want a trade war. And there's one going on right now, which we don't know about it. It's a silent one. And they're winning."
President Obama said "China is both an adversary, but also a potential partner in the international community if it's following the rules. So my attitude coming into office was that we are going to insist that China plays by the same rules as everybody else."
Obama said he set up a trade task force "to go after cheaters when it came to international trade. That's the reason why we have brought more cases against China for violating trade rules than the other — the previous administration had done in two terms. And we've won just about every case that we've filed, that has been decided."
Obama cited the case of U.S. steelworkers who "are in a position now to sell steel to China because we won" one case, and a tire case "in which they were flooding us with cheap ... Chinese tires. And we put a stop to it and as a consequence saved jobs throughout America. I have to say that Governor Romney criticized me for being too tough in that tire case; said this wouldn't be good for American workers and that it would be protectionist."
Obama said U.S. exports to China "have doubled since I came into office ... and actually currencies are at their most advantageous point for U.S. exporters since 1993."
US-China Business Council President John Frisbie responded that "America's economic relationship with China is one of the most important -- and challenging -- issues this country faces," saying U.S. exports to China have grown by 542 percent since 2000, while U.S. exports to the rest of the world grew only 80 percent. "Both presidential candidates have said they will 'get tough' on China, but evidence has shown that the best way to make progress is through comprehensive engagement and legal actions -- not political rhetoric." Frisbie said. "Whoever wins on November 6 will have to prioritize the real challenges the US-China commercial relationship faces: addressing market-access restrictions and unfair trade practices that affect American companies. These challenges require steady engagement, coordination with like-minded allies, and, when necessary, the use rules-based trade tools, such as World Trade Organization cases to level the playing field for American companies and workers."