Kudos to Matt Miller in the Washington Post for asking the $295 billion question– WHO’S GOT THE GUTS TO FINALLY GET TOUGH ON CHINA?
While ManufactureThis has been saying for years that it’s time to tackle China’s egregious cheating at world trade, it’s nice to see the message taking hold. Miller’s basic concern is very similar to that of the Alliance for American Manufacturing (AAM): “Currency manipulation is responsible for millions of lost jobs in the United States.”
As Miller sees it, both the Democratic and Republican parties “have caved for years in the face of China’s bare-faced mercantilism — thanks to risk aversion and negotiating incompetence that have betrayed American workers.”
Here’s where America is at with China right now:
- The U.S. racked up a $295 billion trade deficit with China in 2011.
- The ongoing U.S. trade deficit with China has cost 2.8 million jobs since 2001.
Essentially, the U.S. imports far more from China than it exports, which results in a bilateral trade deficit that dwarfs any trade gap that America has with other industrialized nations.
This shouldn’t come as a total surprise since China has built such a massive export machine, in part by deliberately undervaluing its currency, in violation of world trade law.
This cheating has paid off for China, and Miller cites the work of H.W. Brock, who sees China’s currency so undervalued that it is “arguably one-sixth of what it should be.” Brock calls Washington’s failure to do anything about it a “political disgrace.”
The bottom line, according to Miller, is that “China’s brazen currency manipulation and routine theft of American intellectual property has tilted the playing field unfairly against U.S. jobs.”
So what will either Obama or Romney do?
Obama talked tough on China in the 2008 campaign, especially on China’s deliberate currency manipulation. However, he has not designated China as a currency manipulator since taking office. His administration has filed trade cases against China, though, and has instituted safeguards on surging Chinese tires.
Romney has been taking flak lately for his record at Bain Capital, which has been characterized as very pro-outsourcing. However, Romney has been campaigning on a very hard-line China message. Specifically, he has promised to designate China as a currency manipulator and has also vowed to bar China from access to U.S. government contracts until U.S. firms receive reciprocal access.
Miller concludes by wondering if either Obama or Romney can really take effective action on China:
On Tuesday, Romney, who called China a currency manipulator early on, repeated the charge in his speech to the VFW. He plans on painting Obama as soft on Beijing.
Still, if Romney got rich at Bain in part by tapping China’s unfair advantages, how can he offer himself as the man who can bring China to heel?