Jon Talton Time to play the China blame game?

Mitt Romney chose a seemingly odd place to pick a fight with China, when he gave a speech this month at Microsoft's Redmond headquarters blasting Beijing's currency manipulation and, er, casual attitude about protecting intellectual-property rights.

China is Washington's largest trading partner, representing $10.3 billion in exports in 2010, and a huge import source for the ports of Seattle and Tacoma.

Microsoft employs approximately 1,500 in China and, according to a company publication, "In no other marketplace except the U.S. does Microsoft have such a comprehensive line of operations." These include research and development.

Still, the Republican presidential candidate spoke the truth. China goes to great and expensive lengths to keep its currency artificially low, so as to maintain high employment in an export-based economy. It doesn't do nearly enough to protect intellectual property.

The Senate voted to allow U.S. companies to seek tariffs on Chinese products in retaliation for currency manipulation, although the bill is unlikely to pass the House. The conventional explanation is that this still sends a strong message to Beijing, one the Chinese leaders will, in their own time, heed.

Perhaps. Unfortunately, the U.S.-China relationship and its dysfunction go far deeper than Beijing's refusal to allow the renminbi to appreciate significantly.

Make no mistake: Currency manipulation is real and damaging. In addition to giving China and the other nations that engage in it an unfair price advantage on exports while hindering imports, it encourages the further offshoring of jobs.

The Economic Policy Institute estimates such unfair Chinese tactics cost 2.8 million American jobs from 2001 to 2010.

The game isn't new but it's getting worse.

Policymakers are haunted by the specter of the Smoot-Hawley Tariff of 1930, which raised duties on thousands of imported goods to the United States. Almost all economists and historians agree this played a big role in the Great Depression.

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Jon Talton Time to play the China blame game?

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