The winner of last night's GOP debate? Voters who worry about China.
As surprising as it may sound, the American people could be the surprise winners in last night’s Republican presidential debate.
The Rochester, Michigan GOP event marked a clear step toward a stronger U.S-China trade policy. As national polling has shown, voters across the political spectrum are demanding action on China’s predatory trade practices (especially currency manipulation) which adversely affect U.S. manufacturers and their workers.
An Alliance for American Manufacturing (AAM) poll in July found 86% support for penalizing nations like China that “manipulate exchange rates and implement trade barriers” to gain an unfair advantage.
At the Michigan event, CNBC’s John Harwood doggedly pursued a question on the unbalanced U.S. trade relationship with China:
...under a Republican governor, the state of California hired a company in China to build major portions in the new San Francisco-Oakland Bay Bridge, creating thousands of jobs in China. And California did that because it was cheaper. Is that smart, purchasing by government in a global economy, or is there something wrong with that?
The subsequent sparring on China reflected a diverse set of views among the candidates, with former Massachusetts governor Mitt Romney pressing most forcefully for trade action, while former House Speaker Newt Gingrich trotted out clichéd complaints about China’s low labor costs. Former Ambassador Jon Huntsman seemingly argued for the status quo, while Michele Bachmann cited national security concerns...
“The tax code is what sends jobs overseas. The tax code is what caused them to buy the articles from the Chinese. It starts with replacing the tax code.”
“China is playing by different rules. One, they are stealing intellectual property. Number two, they're hacking into our computer systems, both government and corporate…they are manipulating their currency, and by doing so, holding down the price of Chinese goods, and making sure their products are artificially low-priced. It's predatory pricing, it's killing jobs in America…I would do something this president should have done a long time ago, which is to label China a currency manipulator. And then I would bring in action at the WTO level, charging them with being a currency manipulator.”
“What -- what is it about American regulations, American taxation, American labor cost and attitudes that makes it cheaper to go to China than to go to the United States?...Second, in terms of dealing with China strategically, I think we're going to have to find ways to dramatically raise the pain level for the Chinese cheating, both in the hacking side, but also on the stealing and intellectual property side. And I don't think anybody today has a particularly good strategy for doing that.”
“You start a trade war if you start slapping tariffs randomly on Chinese products based upon currency manipulation. That's not a good idea…But longer term, we're just going to have to keep doing business the way we've always done, is sit down, you find solutions to the problems, and you move forward. It isn't easy. It isn't glamorous. It's grinding it out the way we've done for 40 years. And for 40 more years, we're going to have to do it the same way.”
“Well, the Chinese have been bad actors. Recently we found out that they dumped counterfeit computer chips here in the United States. We're using some of those counterfeit computer chips in the Pentagon in some of our weapons systems. This has national security implications… There's some very real consequences to the United States overspending to such an extent that we're in hock to them over a trillion dollars…What we need to do is stop enriching China with our money. And we do that by stop borrowing from them, by stop spending money that we don't have.”
With the Republican hopefuls starting to formulate a China policy, TIME Magazine’s Joe Klein sees the China issue as a crisis whose time has come. In a forthcoming article, ‘What Keeps Obama Up at Night,’ Klein says that "China ... is the country most likely to have an impact on the presidential campaign”:
Already, Mitt Romney is attacking Obama for not being tough enough on China's economic aggression, and several White House sources have told me that the President is obsessed with finding an effective response. 'You can't just slap tariffs on Chinese products, because of our membership in the World Trade Organization,' an Administration official told me. 'But we are looking very closely at the intellectual-property area.'
"The Chinese routinely force American companies to give up their trade secrets in return for access to China's vast consumer market. U.S. companies hate this, complain about it constantly -- but usually succumb ... 'If we could get a united front from the business sector, we might have some luck in building an international coalition to pressure the Chinese on this,' a White House official told me. 'But that's going to be very hard. Romney is doing the same thing Clinton did in 1992-whacking the Chinese on trade during the campaign. Of course, Clinton turned around as soon as he was elected.'"
At least the China issue is reaching critical mass. Following the news this morning that the U.S. trade deficit with China continues on a record pace, AAM Executive Director Scott Paul sees the problem as one that can no longer be dodged:
“It's clear that China is becoming one of the central issues in the presidential campaign. Voters in manufacturing states--which make up a sizable portion of swing states--will be watching to see who is looking out for their jobs. Mitt Romney is clearly trying to court this vote with unexpectedly bold positions on China's unfair trade practices. President Obama, and Romney's republican competition, should all take note.”
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