Tough Talk on China's Currency

The Democratic candidates were talking to the Alliance for American Manufacturing today, and they had some strong words on the Chinese currency issue.

From Obama:

It’s not just that China is following the path taken by so many other countries before it, and dumping goods into our market while not opening their own markets, something I’ve spoken out against. It’s not just that they’re violating intellectual property rights. They’re also grossly undervaluing their currency, and giving their goods yet another unfair advantage. Each year they’ve had the chance, the Bush administration has failed to do anything about this. That’s unacceptable. That’s why I co-sponsored the Currency Exchange Rate Oversight Reform Act. And that’s why as President, I’ll use all the diplomatic avenues open to me to insist that China stop manipulating its currency.

I thought the reference to "all the diplomatic avenues" was interesting.  Does that include WTO litigation, which as we know has become less diplomatic and more legalistic over the years?  Are his trade advisers carefully wording his statements to make sure he has not committed himself to bringing a complaint?

From Clinton:

With our trade deficit with China now at a record $256 billion, Hillary believes it is time for aggressive action to crack down on China's unfair trade practices. Hillary Clinton will not take a passive line on unfair trade practices and will work to level the playing field for American workers, reducing our trade deficit and keeping more jobs here at home.

1. Take a Tough Line on Currency Manipulation. Foreign countries manipulate their currencies to make American goods expensive in their markets and to make their own goods artificially inexpensive. This practice hurts American workers and domestic producers, and it must end. Hillary is a co-sponsor of legislation that will require the administration to take definitive steps to stop China and other countries from harming American interests by undervaluing their currencies.

• As President, she will move aggressively to address currency manipulation in China and other countries. Hillary has supported legislation to take one or more of the following actions to pressure China to revalue its currency, and will consider all of these actions as President: 1) adjusting export prices to account for the price distortion caused by currency misalignment; 2) disallowing the federal government to purchase products or services from China; 3) directing U.S. banks to pause in issuing loans to China; 4) pressuring the IMF to consult with China; and/or 5) imposing a 27.5 percent tariff on all Chinese goods.

No mention of a WTO complaint here.  Some of the actions listed seem likely to generate a WTO complaint against the U.S., though.

ADDED:  More from Clinton in the transcript of her remarks:

China should be a trade partner, not a trade master. I'll start with currency manipulation. It is outrageous that China and other countries continue to manipulate their currencies to put our goods at a disadvantage.

I've already cosponsored legislation to crack down on currency manipulation as president and I will finish the job.