In practice - though with one big exception - the actual proposals that follow Romney's threat to walk away fall far short not only of "fresh and fearless," but of policy that differs much from the president's. Romney's campaign document includes five points:
- A pledge to "designate China a currency manipulator and impose countervailing duties";
- A promise to spend more money for the US Customs Service to inspect imports;
- A similar promise to spend more money through the US Trade Representative Office to file lawsuits at the World Trade Organization;
- A pledge to "use unilateral and multilateral punitive measures to deter unfair Chinese practices," which is ambiguous but appears to mean enforcing anti-dumping laws;
- An end to US government procurement from China until China commits to join the WTO's Government Procurement Agreement.
Most of this sounds modest and technical - and it is. More striking still, it's mainly a list the Obama administration has already accomplished. A quick trawl through WTO dispute filings, agency budgets and Commerce Department trade litigation show that since 2009 the Obama administration has added trade enforcement staff, filed eight WTO cases against Chinese policies in four years - one more than the seven the Bush administration did over its eight years in office, and imposed 39 anti-dumping and countervailing duty penalties on Chinese imports, which is not far below the 50 the Bush administration did over eight years.
In effect, most of Romney's proposals are promises to continue the Obama administration's policy. The exception is Romney's plan to declare China a "currency manipulator" and impose an across-the-board "countervailing duty" - a big tariff - on Chinese goods.
This is almost identical to the promise Bill Clinton made to withdraw most-favored nation tariff status in 1992. The average US tariff on Chinese goods is about 3 percent, and last year we bought $400 billion in goods from China. A 20 percent countervailing duty - to choose a figure matching common guesses at the degree of currency misalignment - would at face value mean an $80 billion penalty. This is nearly three times the size of the entire $29 billion US national tariff system, easily enough to spark a genuine trade war, a financial shock and an irreparable breach in the larger relationship with China.
The prospect is perhaps not so much "fearless" as "reckless." In the end, even if he wins, the measure seems unlikely to be taken - just as Clinton and Reagan rethought their campaign rhetoric after taking office.
So, should observers, particularly those in China, then discount the campaign's China debate as simply a tired repeat of the past? Not entirely - fearless but ill-advised promises often can lead their authors into traps of credibility and face, and human beings often miscalculate. But they should at least be skeptical. And if Chinese scholar Wang is right, the greater possibility of a permanent breach looks likely to come from the other side of the Pacific.
