— REDMOND, Washington - Republican presidential contender Mitt Romney touted his plan to confront the Chinese government over currency manipulation and pirating of American products Thursday.
But he dismissed the currency bill passed by the Senate Wednesday as “political theater, one more occasion of deceiving the American people into thinking something is being done when nothing is being done.”
He argued that the president already has the power to impose additional duties on the products of nations that manipulate their currencies to gain a trading advantage.
“We don’t need new legislation; we need a new president,” Romney added, a line that drew applause from the audience at the Microsoft corporate headquarters. He spoke there after appearing at a Seattle fundraiser earlier in the day.
In his speech at Microsoft, Romney emphasized his admiration for private-sector workers: “I’m afraid in some corners people don’t like you very much …. They feel somehow business is bad, that business people are bad. I don’t dislike you. I love you. I appreciate what you do.”
Does Obama have power to punish China?
Megan Dubyak, a spokeswoman for Sen. Sherrod Brown, D-Ohio, the principal sponsor of the currency bill, disputed Romney’s argument that the president already has the powers granted in the bill.
She said the president under current law does have the power to label countries as currency manipulators, but does not have the ability to penalize currency manipulation in the same way as he can penalize other subsidies used by foreign governments.
With the U.S. trade deficit with China standing at $189 billion so far this year, up 9 percent from last year, Romney made trade with China a central issue in the debate among the GOP contenders Tuesday night at Dartmouth College in New Hampshire.
The U.S. trade deficit with China accounts for nearly 40 percent of its total trade deficit.
So far this year, American firms have sold more than $66 billion in goods and services to Chinese customers, (up 20 percent from last year) while American consumers have bought $255 billion of goods and services from Chinese firms, an increase of 11 percent from last year. China is the biggest source of U.S. imports.
Romney said in Tuesday’s debate that President Barack Obama and previous presidents “have been played like a fiddle by the Chinese. And the Chinese are smiling all the way to the bank, taking our currency and taking our jobs and taking a lot of our future. And I am not willing to let that happen.”
As long ago as July he complained at a campaign stop in Pataskala, Ohio, that Obama was weak in his dealings with the Chinese.
Obama “said that he was going to take China to the mat,” Romney told workers on his Ohio stop. “Most of us thought he meant the wrestling mat. But instead he and we have been taken to the door mat."
Split in Republican ranks
There’s a split in Romney’s party and even in the ranks of his supporters in the Senate on the currency bill. Two of Romney’s supporters in the Senate, Mississippi Sen. Thad Cochran and Idaho Sen. Jim Risch, voted for the bill, while two, Missouri Sen. Roy Blunt and Utah Sen. Orrin Hatch, voted against it.
All but five Democratic senators voted for the currency bill. Sixteen GOP senators also voted for it.
But House Speaker John Boehner signaled Wednesday that he would not support the bill, making its prospects for House passage dim.
“Given the volatility in the world markets, given the uncertainty about the world economy … taking this step at this moment in time poses a very severe risk of a trade war," Boehner said.
And Obama cautioned at a press conference last week against “just passing laws that are symbolic knowing that they’re probably not going to be upheld by the World Trade Organization ….”
He warned that if that were to happen “suddenly U.S. companies are subject to a whole bunch of sanctions …. I think we’ve got a strong case to make, but we’ve just got to make sure that we do it in a way that’s going to be effective.”
He also argued that his administration has been “more aggressive than any in recent years in going after some of these (Chinese trade) practices. We’ve brought very aggressive enforcement actions against China for violations in the tire case, for example, where it’s been upheld by the World Trade Organization that they were engaging in unfair trading practices.”
In 2009, the Obama administration imposed punitive tariffs of nearly 40 percent on tire imports from China, saying they’d unfairly flooded the American market. But opinion is divided as to how much those tariffs have helped U.S workers: Since then, imports of tires from South Korea, Indonesia, Thailand and Taiwan have soared.
China issue in 2008 election
Four years ago in the 2008 campaign, it was Democratic contender and now Secretary of State Hillary Clinton who raised the issue of China’s growing economic clout and the leverage it had acquired by buying U.S. Treasury bonds.
She also warned of China’s acquisition of an American firm that made magnets from materials known as "rare earths" that are found mostly in China. The magnets are used in U.S. precision-guided weapons.
“The Chinese are convinced that the 21st century is their century …. they are very focused on what they need to do,” she said on the campaign trail in Pennsylvania.
To those who called for getting tough on China for allegedly unfair trade practices, Clinton’s reply was: “How do you get tough on your banker?”