Mr. Romney says China’s leaders are “cheaters” who keep their currency artificially low to make Chinese products cheaper on the world market. He says that on “Day 1” of a Romney presidency, he would declare China a currency manipulator – a step the US has not taken since 1994, but which would pave the way to imposing duties on Chinese products. The US trade deficit with China amounted to nearly $300 billion in 2011.
Obama has resisted demands from both Democrats and Republicans to make the “manipulator” designation, which he says could set off a trade war. Instead, he claims that steady diplomatic pressure has worked better. The administration’s evidence? China’s currency has risen by almost a third against the dollar since 2005, helping to raise Chinese labor and manufacturing costs.
This may be a rare issue where American business aligns more closely with Obama. The US Chamber of Commerce opposes a “manipulator” designation as unnecessary. But Romney’s get-tough position could win him points in some manufacturing swing states where anti-China sentiment runs strong.