WASHINGTON – President Barack Obama’s campaign is hitting back against Mitt Romney’s harsh rhetoric on China, warning that the Republican presidential nominee’s proposals would substantially damage America’s relationship with the country.
During Monday night’s presidential debate, Romney again promised to label China a currency manipulator as soon as he takes office.
“They have to understand, we want to trade with them, we want a world that’s stable, we like free enterprise, but you got to play by the rules,” Romney said.
Nelson Cunningham, a trade policy surrogate for the Obama campaign and managing partner at consulting firm McLarty Associates, said Romney risked starting a trade war.
“The notion that Gov. Romney would want to greet this new leader in China on day one with a declaration that his country is a currency manipulator and setting off a trade war is, to me — I’ll use the term ‘irresponsible,'” Cunningham said during a trade policy debate held at the Ronald Reagan Building and International Trade Center. The debate was sponsored by Washington International Trade Association.
John Herrmann, official trade policy surrogate of the Romney campaign and partner at the law firm Kelley Drye & Warren LLP, explained why he thought a trade war is unlikely.
“I don’t think that necessarily leads to a trade war or even will lead to a trade war,” Herrmann said. “[The] consequences, under statute, [of] designating China a currency manipulator are [that] the United States, either bilaterally or through the IMF, will be required to enter into negotiations with China and find a path forward addressing the currency issue. I think it’s a far cry from launching a trade war against China.”
During the Monday debate, Romney defended his policies when moderator Bob Schieffer asked about a possible trade war.
“We have enormous trade imbalance with China, and it’s worse this year than last year, and it’s worse last year than the year before,” Romney said. “And so we have to understand that we can’t just surrender and lose jobs year in and year out. … We have to say to our friend in China, look, you guys are playing aggressively. We understand it. But this can’t keep on going. You can’t keep on holding down the value of your currency, stealing our intellectual property, counterfeiting our products, selling them around the world, even to the United States.”
Cunningham pointed out that Obama has put “careful, persistent and appropriate pressure” on China to revalue its currency. In the last year and half, he said, Chinese currency has appreciated 11 percent.
“This is about the perceived state of relationship between the U.S. and China,” Cunningham said. “The new Chinese leadership will take this as a hostile move by the Romney administration.”
“We need to think hard about what framework … we can put together internationally that will incorporate these countries, accept their ambitions, harness their ambitions to global goals … That, to me, is the great challenge, and I think my side is better up to it.”