Former Secretary of State Madeleine Albright called Republican presidential candidate Mitt Romney shortsighted in threatening to designate China a currency manipulator on his first day in office.
“So what happens on day two?” Albright said today in a Bloomberg Government interview at the Democratic National Convention in Charlotte, North Carolina. She suggested the move would risk retaliatory sanctions from the Chinese government.
“Clearly there are issues of currency with the Chinese,” Albright said, adding that Romney’s threat “is an example, if I may say so, of very shortsighted statements that don’t make any sense.”
Romney, a former Massachusetts governor and private-equity executive, has made a forceful stance on trade competition with China a centerpiece of his appeal to working-class voters in battleground states such as Ohio, and regularly criticizes President Barack Obama for failing to sanction China.
Romney’s campaign website says that one of five executive orders the Republican would issue on his first day in the White House would be directing the Treasury Department to list China as a currency manipulator and instructing the Commerce Department “to assess countervailing duties on Chinese imports if China does not quickly move to float its currency.”
The yuan fell 0.03 percent to close at 6.3492 per dollar in Shanghai, according to the China Foreign Exchange Trade System. While the currency has appreciated, the Treasury Department has labeled the yuan “significantly undervalued,” which gives China, the world’s second-largest economy, a trade advantage.
The U.S. ran a $27.4 billion trade deficit with China in June, up from $26.7 billion for the month a year earlier, according to the U.S. Census Bureau, which doesn’t seasonally adjust the figure. The deficit with China in goods totaled $295 billion last year, the largest the U.S. has had with any country.
At the same time, China is the third-largest U.S. export market behind Canada and Mexico, and many of the largest U.S. companies prefer a less confrontational approach than Romney’s.
The U.S.-China Business Council, a trade association including Exxon Mobil Corp. (XOM:US), General Electric Co. and Google Inc. (GOOG:US), plays down the importance of the currency issue and says any approach to “global economic imbalances” should be multilateral.
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