Here's What Romney And Obama REALLY Plan To Do About China

With Ohio apparently slipping from Mitt Romney's grasp, the Republican presidential candidate has ramped up his tough talk on China this week in a major push to win over the manufacturing-heavy Rust Belt state.

At dueling campaign events in Ohio today, Romney and President Barack Obama traded jabs over each other's policies toward China, with each candidate accusing his opponent of being too soft on the Asian giant.

On the one hand, Romney is accusing Obama of failing to label China a "currency manipulator" and of bragging about trade policies that have "failed, expired, or been described as peanuts."

On the other side, Obama has accused Romney of talking a big game on China, despite having profited off of companies that outsourced American jobs to China, a claim that is factually shaky and likely irrelevant to any actions Romney would take as president.

The reality is that most voters probably don't understand the complicated economic relationship between the U.S. and China. Both candidates are betting that the fear card — "My opponent wants to ship your job to China" — will play well in a manufacturing state where the issue of outsourcing resonates strongly with voters.

But where do the candidates actually stand on issues related to trade with China?

Here's a breakdown:

As a candidate in 2008, Obama also talked a tough game on China, which, like Romney in 2012, he labeled a currency manipulator. After the election, Treasury Secretary Tim Geithner affirmed this characterization, telling Senate during his confirmation hearing that he too believes China is manipulating its currency.

That talk has not translated into a lot of action on Obama's part, and the Treasury Department has not labeled China a currency manipulator on any of its semi-annual reports since Obama took office.

On the other hand, Obama has become increasingly forceful in his dealings with the Chinese leadership. In 2010, during his meeting with the Chinese Prime Minister, Obama reiterated his demand that China start addressing currency manipulation, and said the U.S. would consider a tariff on goods from China if no action was taken. He has also been more aggressive in demanding the Chinese government take action to protect U.S. intellectual property rights, although his administration has taken little action to make this happen.

The Obama administration has also filed seven complaints with the World Trade Organization, most of which have been pretty successful. The last complaint, filed in July, addresses Chinese automobile duties, an issue that plays well in Ohio.

In his economic plan, Romney specifically addresses China's unfair trade practices as an obstacle to U.S. economic growth, and outlines several steps his administration would take to force China to comply with existing trade agreements. These include:

  • Improving border enforcement to keep Chinese counterfeit products out of the country, and devote resources to breaking up export networks that bring the products to the U.S.
  • Empowering the Office of the U.S. Trade Representative to protect U.S. businesses by pursuing claims of unfair trade practices against China, and helping them raise claims in U.S. courts and at the WTO.
  • Impose targeted tariffs and unilateral or multilateral sanctions on Chinese industries or firms that use unfair trade practices or pirated U.S. technology.
  • Designate China a currency manipulator and impose countervailing duties if China "fails to move quickly to bring its currency to fair value."
  • End the use of Chinese goods and services by the U.S. government until China agrees to the WTO's Government Procurement Agreement, which prohibits member governments from discriminating against one another's products and services.

To be fair, the relationship between the U.S. and China is extremely complicated and extends far beyond trade issues, so it is virtually impossible to know how any president will act when it comes to these issues. To make matters even more difficult, the Chinese government is in the midst of a messy leadership change that could further complicate things for whoever winds up in the Oval Office next year.