Obama takes fresh aim at China, touts "insourcing"

President Obama holds up a padlock alongside Master Lock's Senior Vice President Bob Rice, as Obama tours the factory in Milwaukee, Wisconsin February 15, 2012.

MILWAUKEE (Reuters) - President Barack Obama kept up his attack on Chinese trade practices during a campaign-style visit on Wednesday to a Midwest factory, where his call to bring jobs back home was intended to resonate with voters in an election year.

The day after meeting China's leader-in-waiting, Vice President Xi Jinping, at the White House, Obama cited America's chief rival a number of times in a speech to promote the potential of "insourcing" jobs back to America from overseas.

"I'm not going to stand by when our competitors don't play by the same rules," he told workers at Master Lock, a company he lauded in his State of the Union address last month for having moved back about 100 union jobs from China since mid-2010.

"So I directed my administration to create a Trade Enforcement Unit, and it's only got one job: investigating unfair trade practices in countries like China," he said at the start of a three-day swing to promote his reelection message.

Obama took a firm line over trade on Tuesday during his Oval Office meeting with Xi, who is in line to assume the Chinese presidency in March 2013. Xi is visiting the United States this week and urged greater cooperation between Beijing and Washington on Wednesday.

Obama's tough stance should appeal to voters in election battleground states like Wisconsin, which have witnessed many factory closures over the years as manufacturing shifts abroad, and where Beijing is often blamed for killing American jobs.

How to cope with a rising China - and compete against cheap Chinese exports - is one of the challenges the president must navigate as he seeks reelection, with polls showing rising U.S. voter frustration with the Asian economic powerhouse.

He proposes closing tax breaks for companies that move U.S. jobs overseas, while providing incentives to firms that bring work home, particularly in high-tech manufacturing. Republicans say that adding extra rules will not spur U.S. job creation.

"The best thing the president can do to prevent outsourcing is pull back on the destructive policies - like his health care law and regulations - and threat of tax hikes," said Brendan Buck, spokesman for House of Representatives Speaker John Boehner, the top Republican in Congress.

Attacking his economic stewardship, Republicans cast Obama as a tax and spend liberal as they seek to deny him a second White House term and Mitt Romney, the party's front-runner to confront him in November, also says he is too soft on China.

Master Lock, a unit of Fortune Brands Home & Security, says its Milwaukee plant is running at full capacity for the first time in 15 years - an example the White House is eager to replicate as the November 6 election nears.

"More and more companies (are)...deciding that if the cost of doing business here isn't too much different than the cost of doing business in places like China, then why wouldn't you rather do it right here in the United States," Obama said.

It was his first event in a three day campaign-style swing that will also include fund-raising stops in California and a visit to aircraft maker Boeing in Washington state.

(Additional reporting by Alister Bull and Matt Spetalnick in Washington; Editing by Anthony Boadle)