I know Americans had seen jobs being shipped overseas; businesses and workers not getting a level playing field when it came to trade. And that's the reason why I set up a trade task force to go after cheaters when it came to international trade. That's the reason why we have brought more cases against China for violating trade rules than the other -- the previous administration had done in two terms. And we've won just about every case that we've filed, that has been decided.
OBAMA: In fact, just recently steelworkers in Ohio and throughout the Midwest -- Pennsylvania -- are in a position now to sell steel to China because we won that case. We had a tire case in which they were flooding us with cheap domestic tires -- or -- or cheap Chinese tires. And we put a stop to it and as a consequence saved jobs throughout America. I have to say that Governor Romney criticized me for being too tough in that tire case; said this wouldn't be good for American workers and that it would be protectionist.
But I tell you, those workers don't feel that way. They feel as if they had finally an administration who was going to take this issue seriously.
Over the long term, in order for us to compete with China, we've also got to make sure, though, that we're taking -- taking care of business here at home. If we don't have the best education system in the world, if we don't continue to put money into research and technology that will allow us to create great businesses here in the United States, that's how we lose the competition. And, unfortunately, Governor Romney's budget and his proposals would not allow us to make those investments.
SCHIEFFER: All right.
ROMNEY: Well, first of all, it's not government that makes business successful. It's not government investments that makes businesses grow and hire people.
Let me also note that the greatest threat that the world faces, the greatest national security threat is a nuclear Iran.
Let's talk about China. China has an interest that's very much like ours in one respect, and that is they want a stable world. They don't want war. They don't want to see protectionism. They don't want to see the world break out into -- into various forms of chaos, because they have to -- they have to manufacture goods and put people to work and they have about 20,000 -- 20 million, rather, people coming out of the farms every year coming into the cities, needing jobs.
So they want the economy to work and the world to be free and open. And so we can be a partner with China. We don't have to be an adversary in any way, shape or form. We can work with them, we can collaborate with them, if they're willing to be responsible.
Now, they look at us and say, Is it a good idea to be with America? How strong are we going to be? How strong is our economy? They look at the fact that we owe 'em a trillion dollars and owe other people $16 trillion in total, including that.
ROMNEY: They look at our -- our decision to -- to cut back on our military capabilities. A trillion dollars. The secretary of defense called these trillion dollars of cuts to our military devastating. It's not my term, it's the president's own secretary of defense called these trillion dollars of cuts to our military devastating. It's not my term, it's the president's own Secretary of Defense, called them devastating.
They look at America's commitments around the world and they see what's happening, and they say, well, OK. Is America going to be strong? And the answer is, yes, if I'm president, America will be very strong.
We'll also make sure that we have trade relations with China that work for us. I've watched year in and year out as companies have shut down and people have lost their jobs because China has not played by the same rules, in part by holding down artificially the value of their currency. It holds down the prices of their goods. It means our goods aren't as competitive and we lose jobs. That's got to end.
They're making some progress; they need to make more. That's why on day one, i will label them a currency manipulator, which allows us to apply tariffs where they're taking jobs. They're stealing our intellectual property, our patents, our designs, our technology, hacking into our computers, counterfeiting our goods.
They have to understand we want to trade with them. We want a world that's stable. We like free enterprise, but you got to play by the rules.
SCHIEFFER: Well, Governor, let me just ask you. If you declare them a currency manipulator on day one, some people are -- say you're just going to start a trade war with China on day one. Is that -- isn't there a risk that that could happen?
ROMNEY: Well, they sell us about this much stuff every year, and we sell them about this much stuff every year. So it's pretty clear who doesn't want a trade war. And there's one going on right now, which we don't know about it. It's a silent one. And they're winning.
We have enormous trade imbalance with China, and it's worse this year than last year, and it's worse last year than the year before. And so we have to understand that we can't just surrender and lose jobs year in and year out. We have to say to our friend in China, look, you guys are playing aggressively. We understand it. But this can't keep on going. You can't keep on holding down the value of your currency, stealing our intellectual property, counterfeiting our products, selling them around the world, even to the United States.
I was with one company that makes valves and -- and process industries and they said, look, we were -- we were having some valves coming in that -- that were broken and we had to repair them under warranty and we looked them and -- and they had our serial number on them. And then we noticed that there was more than one with that same serial number. They were counterfeit products being made overseas with the same serial number as a U.S. company, the same packaging, these were being sold into our market and around the world as if they were made by the U.S. competitor. This can't go on.
I want a great relationship with China. China can be our partner, but -- but that doesn't mean they can just roll all over us and steal our jobs on an unfair basis.
OBAMA: Well, Governor Romney's right, you are familiar with jobs being shipped overseas because you invested in companies that were shipping jobs overseas.
And, you know, that's -- you're right. I mean that's how our free market works. But I've made a different bet on American workers.
If we had taken your advice Governor Romney about our auto industry, we'd be buying cars from China instead of selling cars to China.
If we take your advice with respect to how we change our tax codes so that companies that earn profits overseas don't pay U.S. taxes compared to companies here that are paying taxes. Now that's estimated to create 800,000 jobs, the problem is they won't be here, they'll be in places like China.
And if we're not making investments in education and basic research, which is not something that the private sector is doing at a sufficient pace right now and has never done, then we will lose the (inaudible) in things like clean energy technology.
Now with respect to what we've done with China already, U.S. exports have doubled since I came into office, to China and actually currencies are at their most advantageous point for U.S. exporters since 1993.
We absolutely have to make more progress and that's why we're going to keep on pressing.
And when it comes to our military and Chinese security, part of the reason that we were able to pivot to the Asia-Pacific region after having ended the war in Iraq and transitioning out of Afghanistan, is precisely because this is going to be a massive growth area in the future.
And we believe China can be a partner, but we're also sending a very clear signal that America is a Pacific power; that we are going to have a presence there. We are working with countries in the region to make sure, for example, that ships can pass through; that commerce continues. And we're organizing trade relations with countries other than China so that China starts feeling more pressure about meeting basic international standards.
That's the kind of leadership we've shown in the region. That's the kind of leadership that we'll continue to show.
ROMNEY: I just want to take one of those points, again, attacking me as not talking about an agenda for -- for getting more trade and opening up more jobs in this country. But the president mentioned the auto industry and that somehow I would be in favor of jobs being elsewhere. Nothing could be further from the truth.
I'm a son of Detroit. I was born in Detroit. My dad was head of a car company. I like American cars. And I would do nothing to hurt the U.S. auto industry. My plan to get the industry on its feet when it was in real trouble was not to start writing checks. It was President Bush that wrote the first checks. I disagree with that. I said they need -- these companies need to go through a managed bankruptcy. And in that process, they can get government help and government guarantees, but they need to go through bankruptcy to get rid of excess cost and the debt burden that they'd -- they'd built up.