Obama, who drew flak from his own party for a lacklustre performance in round one two weeks ago, this time often dictated the terms of the debate questioning Romney's approaches towards China, immigration, taxes, unemployment, gun laws and other domestic and foreign issues.
During the 90-minute face-off at the Hofstra University here for a town hall style debate, Romney retorted claiming US has been losing manufacturing jobs to China as enterprises feel it is "more attractive" to go offshore than to stay here.
A snap CNN/ORC International poll showed 46 per cent of respondents thought 51-year-old Obama won, compared to 39 per cent for 65-year-old Romney. The result was within the survey's margin of error.
Both Obama and Romney fielded questions also on topics like gas prices and Libya from members of the audience, a group of 82 undecided voters from New York's Nassau County.
The question on outsourcing of American jobs overseas came at the fag end of the debate, which saw an aggressive and assertive Obama take on Romney as he tried to improve on his performance at the first debate in Denver where the Republican leader came out as the surprise winner.
"One of his (Romney's) big ideas when it comes to corporate tax reform would be to say, if you invest overseas, you make profits overseas, you don't have to pay US taxes.
"But, of course, if you're a small business or a mom-and- pop business or a big business starting up here, you've got to pay even the reduced rate that Governor Romney's talking about. And it's estimated that that will create 800,000 new jobs. The problem is they'll be in China. Or India. Or Germany," Obama said.