Whipping up resentment against foreign trading partners is a time-honored way for candidates of both parties to score cheap political points. Romney's China-bashing today is reminiscent of the Japan-bashing that candidates like Pat Buchanan and Dick Gephardt sought to ride to the White House a generation ago. What makes this candidate's protectionist rabble-rousing so disappointing is that he knows perfectly well how superficial and spurious it is.
The vehement line of attack Romney keeps up against China today is absent from the manifesto he published last year. In No Apology, Romney emphasized protectionism's self-destructiveness. "US companies faced with... less costly products from overseas have to make one of two choices," he wrote. One is to improve their own technology and productivity; the other is to "argue for protection, hold on as long as possible, and slowly watch their market share wane." Far from endorsing vigorous presidential action against foreign competitors, he faulted George W. Bush and Barack Obama for yielding to protectionist special pleading. The Obama administration's punitive tariffs on Chinese tires may have been "good politics," Romney declared, "but it is decidedly bad for the nation and our workers. Protectionism stifles productivity."
It may be true, as Romney and others claim, that China artificially undervalues its currency, thereby making Chinese goods less expensive to import than they otherwise would be. It's easy to understand why some manufacturers might not happy about that, but for US consumers generally China's policy is a blessing. "By keeping the value of its currency low, Beijing enables Americans to stretch our dollars farther," economist Donald Boudreaux remarks. "This results in significant improvements in living standards" -- especially for poor and working-class Americans. Does Romney really think that's a bad thing?
And does he really believe it's in the US interest to hold the threat of new tariffs over the heads of Chinese manufacturers? Romney's "Day One" threat to slap higher duties on Chinese imports is just another way of saying that if China doesn't force Americans to pay more for made-in-China products, Washington will. Tariffs are taxes, and they will do more than hurt millions of American shoppers for no good reason. They will also penalize innumerable businesses that rely on imported goods and materials, and the myriad of employees, managers, and shareholders whose economic welfare is linked to those businesses' success.
As it happens, the value of China's currency has appreciated by around 30 percent in recent years and is likely to keep climbing. But from an American perspective, it shouldn't matter whether imports from China cost less because Beijing manipulates the yuan, because Chinese manufacturers have access to abundant raw materials, or because of a new technology that turbocharges Chinese productivity. Whatever the reason, the bottom line is the same: lower prices for US consumers. And lower prices aren't something from which Americans need to be rescued by politicians.
"When I see an American company challenged by a foreign competitor," Romney wrote in his book, "I don't look for protectionist policies as an answer to the company's problems." If only that Romney were the one running for president.
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