Vows to get tough on China by presidential candidates Mitt Romney and Barack Obama are unlikely to spark a trade war because of the Asian nation’s slowing economy, Business Roundtable President John Engler said.
“The economic weakness in China is such that there is scant likelihood” of aggressive action against the U.S., and both countries need one another for their own growth, the former Republican governor of Michigan said after an interview in Washington for Bloomberg Television’s “Capitol Gains” program that will air Nov. 4. The world’s second-largest economy has also gotten used to campaign criticism, he said. “They’ve been hearing it for some time.”
General Motors Co. (GM) and Chrysler Group LLC have both criticized Romney’s campaign for running television ads in Ohio they say implies that growth in China comes at the expense of U.S. jobs. President Obama, meanwhile, has touted his administration’s record of trade cases against China, saying he has brought twice as many actions alleging unfair trading practices than under former President George W. Bush.
China’s gross domestic product, which the government says will grow by 7.5 percent this year, may decelerate next year to 7 percent, the slowest pace since 1990, according to Honeywell International Inc. (HON), a U.S. manufacturer that sells aerospace parts in the world’s most populous nation.
The Business Roundtable, an organization of chief executive officers of companies including Boeing Corp., JPMorgan Chase & Co., General Electric Co. and Wal-Mart Stores Inc., does not take sides in political races. While Engler said he personally believes Romney will defeat Obama, he said the organization is “very careful never to get involved.”
There’s a “massive job ahead” for whoever wins the White House, beginning with the so-called fiscal cliff, the $607 billion in automatic spending cuts and tax increases that take effect next year should Congress not reach a compromise on reducing the federal deficit. Resolving that crisis is “pretty straightforward” compared to longer-term issues of changing the tax code to make business more competitive and fixing programs such as Medicare to rein in spending, he said.
“The United States today is poised to lead a global recovery,” he said, though “not if we keep putting off big decisions.”
To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomber