Loading…
Thursday, November 27, 2014
Current Weather
Loading Current Weather....
Published: Friday, 9/21/2012 - Updated: 2 years ago

Bashing for votes

During campaign stops this week in Cincinnati and Columbus, President Obama said his administration is bringing a case against China before the World Trade Organization, accusing Beijing of illegally subsidizing exports of autos and auto parts to the United States. It was no accident that he made that pledge in a political swing state that is also the nation's leading producer of auto parts.

Mr. Obama's announcement momentarily trumped Mitt Romney's tough-on-China talk. Campaign ads for the Republican challenger accuse the President of not doing enough to crack down on China's "cheating" -- in particular, manipulating its currency on global markets to make its exports relatively cheaper.

Read more Blade editorials

China-bashing has been a staple of presidential campaigns for decades. Ohioans, Michiganians, and other Americans conclude that unfair import -- and especially Chinese -- competition is costing this country lots of jobs, largely because candidates of both parties keep telling them the "playing field" is tilted.

But before the presidential nominees commit themselves to positions that could lead to a trade war with China, they might disclose their plans for ending such a war once it starts. China has become not only one of the largest U.S. export markets, but also one of its biggest creditors. These would be potent weapons for China to wield in retaliation.

The trade case the administration announced this week follows an action Mr. Obama discussed during a visit to Toledo in July, addressing the "unfair imposition" of import duties on cars and trucks made here and shipped to China. The President also has formally challenged China's alleged dumping of low-cost auto tires on the American market.

In response, China has slapped new duties on U.S.-built vehicles. Chinese officials also argue that the federal bailout of General Motors and Chrysler, one of the Obama campaign's biggest talking points in Ohio and Michigan, was itself an improper government subsidy.

The Obama Administration deserves the chance to make its case that China's refusal to play by global trade rules has distorted export markets and directly caused the loss of American jobs. But some economists argue that if cheaper imported parts help lower the cost of making cars in this country, that could increase rather than diminish the number of U.S. auto-assembly jobs.

Nor is the currency issue as one-sided as Mr. Romney asserts. To the extent Beijing keeps the value of its currency artificially low to promote its exports at the expense of U.S. and other competitors, that policy can benefit U.S. buyers of Chinese goods, and harm Chinese consumers when they buy goods at inflated prices.

U.S. diplomats have started to gain traction with the latter argument among their Chinese counterparts, albeit not as quickly as Americans would like. But Mr. Romney's vow to declare China a currency violator on "day one" of his administration, leading to trade penalties, would not necessarily achieve greater results.

Washington needs to continue to confront Beijing on such issues as theft of intellectual property. But U.S. protectionism to fight Chinese protectionism threatens a trade war that would cost more domestic jobs, make the protected industries less efficient, and raise prices for American consumers.

President Obama and Mr. Romney, as well as Chinese leaders, may want to consider the prospects of such collateral damage before they bash each other again on trade.



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.

Related stories