U.S. Presidential Trade Politics & Trade with China

1. U.S. Presidential Trade Politics & Trade with China Eric Di Silvestro

2. 2012 Election Candidates • Democrat • President Barack Obama (Incumbent) • Republicans • Governor Mitt Romney • Senator Rick Santorum • Speaker Newt Gingrich • Congressman Ron Paul

3. U.S.-China Trade Facts • Total U.S.-China trade rose from $2 billion in 1979 to $457 billion in 2010. • China is currently the second largest U.S. trading partner, our third-largest export market, and our biggest source of imports. • Because U.S. imports from China have risen much more rapidly than U.S. exports to China, the U.S. merchandise trade deficit has surged, rising from $10 billion in 1990 to $273 billion in 2010.

4. The Good News • Over 1.3 billion potential customers! • U.S. imports of low-cost goods from China greatly benefit U.S. consumers by increasing our purchasing power. • U.S. firms that use China as the final point of assembly or use Chinese-made inputs for U.S. production, can lower costs and become more globally competitive. • China’s purchases of U.S. Treasury securities (which stood at nearly $1.2 trillion as of July 2011)

5. The Bad News • Lack of Intellectual Property Protection • Mixed record on implementing its obligations in the WTO • China uses industrial policies • Currency manipulation

6. Americans impressions of China

7. Voters on both sides want a tough stance on trade policy with China

8. Majority believes China to be an adversary or a serious problem

9. President Barack Obama • Campaign Website is silent: • Under “Jobs and the Economy” China is not addressed at all. • The word “Trade” is mentioned once regarding “Trade Agreements with Panama, Colombia, and South Korea.” • “Free” is notably absent from the reference. • Trade Adjustment Assistance was once mentioned but removed at some point.

10. President Obama Cont. • His website is silent because he has the advantage of incumbency. • So he is loud in his official capacity as President. • Tariffs on Chinese Tires • Addressing China in the State of the Union • Creating the Interagency Trade Enforcement Center • Bringing Cases to the WTO

11. Governor Mitt Romney • On his issues page Governor Romney addresses both China and trade • With trade • He supports the TPP, • the Reagan Economic zone and, • reinstating the Trade Promotion Authority which expired in 2007.

12. Governor Romney cont. • On China, he takes a hard stance. Promising to: • enforce stronger protections of our IP • Designate China a currency manipulator and impose countervailing duties • Use unilateral and multilateral punitive measures to deter unfair Chinese practices

13. Senator Santorum • Addresses Trade with his “Made in America” plan. • However no mention of China except for human rights issues. • He would like to see the United States take a stronger stand with China and wants to rebuild the United States so that it can be a stronger player on the world stage.

14. Congressman Ron Paul • He fully embraces free trade and rejects protectionism. So much so that he rejects FTA’s. • “He opposes many free trade agreements, like NAFTA, stating that “free-trade agreements are really managed trade” and serve special interests and big business, not citizens.” • He does not go after the Chinese currency issue though.

15. Speaker Newt Gingirich Strong supporter of trade and not going after China. • On the Fox program Hannity, Gingrich argued that the United States should worry more about itself than about China's policies. "If we do the right things in America, we can compete with China and India for the next 100 years," he said.

16. Why go after China? • Polls say it is a winner • 53% of voters want the U.S. to be tougher on trade. • They can’t vote in our elections. However, this could have potential negative consequences.

17. Potential Consequences • Rhetoric could cause a tit-for-tat trade war. • China put tariffs on American chicken imports when President Obama put tariffs on their tires. • What if a President Romney declared China a currency manipulator? • Perhaps China could boycott Boeing airplanes instead opting for Airbus. • Maybe they call the United States a manipulator too. • QE 1 and QE2

18. But there is hope! • Campaign rhetoric usually just remains rhetoric • In 2008, candidate Obama called for renegotiating NAFTA during his campaign. • Still waiting… • Experts in China believe the rhetoric is just that.

19. Bibliography • United States. Congressional Research Service. China-U.S. Trade Issues. By Wayne M. Morrison. 30 Sept. 2011. Web. • 12, January. "Strengthen Ties with China, But Get Tough on Trade." Pew Research Center. Web. 12 Feb. 2012. <http://pewresearch.org/pubs/1855/china-poll-americans-want-closer-ties-but-tougher-trade-policy>. • Rapoza, Kenneth. "China Getting Concerned Over Trade War." Forbes. Forbes Magazine, 01 Mar. 2012. Web. 23 Mar. 2012. <http://www.forbes.com/sites/kenrapoza/2012/03/01/china-getting-concerned-over-trade-war/>. • Ron Paul US/China Commercial http://www.youtube.com/watch?v=LeL9ov_yS18 • "The Candidates on U.S. Policy toward China." Council on Foreign Relations. 17 Feb. 2012. Web. 24 Mar. 2012. <http://www.cfr.org/us-election-2012/candidates-us-policy-toward-china/p26883>. • Guangjin, Cheng. "China-bashing in GOP Election Campaign 'no Cause for Concern'“. 10 Jan. 2012. Web. 25 Mar. 2012. <http://www.chinadaily.com.cn/china/2012-01/10/content_14410319.htm>.