Obama, WH come out swinging after Romney ad promises to ... make China play by the rules; Update: Romney campaign responds

It was an innocuous moment in an ad with at least one tougher attack line, but it certainly got the attention of the White House and the Obama campaign, as Olivier Knox discovered. At the 14-second mark of the ad released yesterday by the Romney campaign, the announcer says that Mitt Romney “stands up to China on trade and demands they play by the rules” on Day 1 of his presidency.  That’s a lot less direct a criticism than what precedes it in the ad — Romney’s promise to “end Obama Era of Big Government” — and yet from the reaction one might think that Team Romney had accused them of attacking motherhood:


“Despite his tough talk now, Governor Romney wasn’t always for enforcing trade laws against China,” White House press secretary Jay Carney told reporters aboard Air Force One.

Carney, who frequently shies away from questions about the campaign, referred reporters to Romney’s book, “No Apology: The Case for American Greatness.” He said the former Massachusetts governor had “attacked the president for standing up for American workers and businesses by enforcing trade law against China, even calling it ‘bad for the nation and our workers.'” (Carney did not use the book’s title. But in a separate press release, the Obama campaign cited the same quote and did so).

“The fact that Governor Romney is criticizing the president from one side despite having occupied the other side of the issue I suppose is not very surprising,” Carney said.

(Stop and consider that the totality of the Romney ad’s comment on the issue is a pledge that on his hypothetical first day in office “President Romney stands up to China on trade and demands they play by the rules.”)

This demonstrates two problems for the Obama administration.  As Knox notes in his report, Obama has come under considerable pressure to define China as a currency manipulator, a charge on which everyone agrees, but which the Obama administration has avoided thus far.  When running deficits this large, Obama can’t afford to anger one of the more reliable creditors we have.  The manipulation does put the US at a disadvantage, though, and it does cost jobs.  In places like Ohio and Pennsylvania, getting tough on China is a popular theme, and to the extent that Romney can paint Obama as weak in the relationship, he could do real damage to Obama.  That’s why this rather innocuous line got not one, not two, but three separate pushbacks in the span of a few hours from the White House and Team Obama.

Secondly, it shows a little of the desperation that has begun to afflict the Obama camp.  Their one big attack strategy, Bain Capital, has turned into a pratfall, with Obama as the joke.  They need a new line of attack against Romney, and the opposition in his book to the Obama tariffs on Chinese tires might look like a more profitable point — but not if Romney can define Obama as weak on China first.  Unfortunately, Obama can’t afford to get any tougher with China thanks to the massive deficits he’s running as President, and that means Romney can attack on both spending and jobs fronts in the way Obama has handled the relationship with China.

Update: Just a few minutes after this post went live, the Treasury Department once again refused to label China a currency manipulator:

In a semi-annual report on exchange rate policies, Treasury said that China’s currency remains “significantly undervalued” and “further appreciation of the [yuan] against the dollar and other major currencies is warranted.”

But, the report said, based on the strengthening of the yuan since 2010, the decline in China’s current account surplus, and China’s commitment to strengthen its currency, Beijing did not meet the standards under law as a currency manipulator.

The value of China’s currency could be a campaign issue in the battle for the White House.

Romney said that if he was elected he would formally name Beijing a currency manipulator on his first day in office and was willing to apply tariffs on Chinese goods if necessary to force appreciation.

The Romney campaign sent over this statement:

“For American businesses and workers who want to compete on a level playing field in the international economy, the choice has never been clearer. Just this Thursday, Governor Romney reiterated his commitment to demand from Day One that China play by the rules. On Friday, President Obama tried to hide his administration’s decision not to acknowledge that China manipulates its currency with a delayed Memorial Day weekend announcement.  We need a President who understands the principles of free enterprise and will stand up for them around the world.” – Romney for President Policy Director Lanhee Chen

Looks like Team Romney has really gotten inside Team Obama’s heads on this one.

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