Obama, Romney talk tough on China -- but could it hurt the US economy?

As the race for the White House heads into the home stretch, there does appear to be at least one area of agreement between the two candidates. Each thinks the United States should get tougher on China. In fact, President Obama and Mitt Romney have been trying to out-tough each other when it comes to how they would deal with China over the next four years.

“We have brought more trade cases against China in one term than the previous administration did in two,” Obama said recently on the stump.

“On day one, I’ll label China a currency manipulator and that will allow me to apply tariffs where they steal our intellectual property and kill jobs,” Romney frequently tells cheering crowds.

But while China-bashing may help win some votes in key states that have lost manufacturing jobs -- like the pivotal battleground of Ohio -- the campaign rhetoric worries the rising number of Americans who owe their jobs to open trade with the fastest-growing economy in the world.

“To have this rhetoric that’s really talking about ‘China is bad, we want to be punitive against China’, yes, I think it plays well on the campaign trail, but in the long term that could really hurt our economic relationship,” said Eric Schinfeld, of the Washington Council on International Trade.

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    There is evidence it already has had a negative effect. A Pew study found views among Chinese citizens toward the United States are changing. In 2010, 68 percent of the people surveyed described the relationship with the U.S. as cooperative. This year that number is down to 39 percent. Meantime, the percentage of people calling it a hostile relationship has jumped from 8 to 26.

    That worries business leaders like Kathi Rennaker, the marketing manager at candy maker Brown and Haley in Tacoma, Wash. Forty percent of the company’s business is now exports, and China is the biggest customer. Each day the company makes 2.5 million pieces of candy under its brand Almond Roca.

    “Chinese New Year is our second largest selling season, only after the holidays here in the U.S.,” Rennaker said.

    China is also critical to the nation’s biggest exporter, Boeing. In the last 40 years, Boeing has delivered 782 planes to China. But the company is forecasting China will need to triple its fleet and buy more than 5,000 new planes in the next 20 years. That’s a $670 billion market.

    California sells the most goods to China. Last year companies in the Golden State earned $14.2 billion in exports to China. Washington state was close behind with $11.2 billion, a year-over-year increase of 489 percent. A recent study found 40 percent of all the jobs in Washington state are at least partially tied to international trade. Yet, organized labor continues to hammer China over the still-growing trade imbalance and all the lost manufacturing jobs.

    “The outsourcing issue is huge,” said Jeff Johnson, president of the Washington State Labor Council. “We’ve lost 50,000 manufacturing factories and plants over the last decade. That’s about six million manufacturing jobs.”

    Despite strengthening exports to China, the trade imbalance grew to $295 billion in 2011. Some argue the cheap imported goods from China allow Americans to have more disposable income. As for businesses across America, as the world economy shrinks many more are figuring out how to sell their goods in China.

    Forty-eight states have registered at least triple-digit export growth to China since 2000. Twenty-two of those states saw those China exports quadruple. Tariffs being slapped on goods by either government could slow the flow of goods back and forth.