Romney has increased the rhetoric on China, which is a good thing. See the campaign video below. He is calling them “cheaters”, which is true, but not always said in polite company. The China trade deficit issue, caused by cheating, is the biggest economic problem we have right now.
Obama has refused to respond on currency manipulation… rather he and Geithner keep using diplomacy to ask China to play fair on currency valuation, like Bush and Clinton before them. While Obama has stepped up WTO enforcement cases, enforcement of WTO rules is simply not enough. They are industry by industry, product by product. China’s currency manipulation, VAT subsidies, super-charged state owned commercial enterprises, etc. are economy-wide problems. Bigger solutions than trade law enforcement are necessary.
Romney should press Speaker Boehner to pass the currency manipulation bill (HR 639), but has not so far. Romney’s specific pledge is that his administration would declare China a currency manipulator on Day One. That’s better than Obama. The cause for concern is that (1) there is no remedy to resolve the situation after declaring them a currency manipulator; and (2) Romney has refused to specify a remedy.
The ultimate solution is to set a balanced trade goal and take all necessary action to achieve it. CPA’s 21st Century Trade Agreement Principles would help achieve a balanced trade goal.
That being said, the increased attention on the China issue is needed. Here is the Romney video.
Here is the Obama campaign response video.