And who is it that has been buying all the US Treasury debt that continues to be issued to fund the budget? You know, that doubling of the national debt under "W" and then doubling again under Obama. Answer: China, and every other nation with which the USA is running a current account deficit. Be careful what you wish for, because that is the burden that comes with the "exorbitant privilege" of issuing the world's reserve currency. And if that goes away, like it did for the UK early in the last century, the USA will have much larger problems than China.
Since this is an aviation forum let's use an aviation example. Roughly 30% of the content of a Boeing 787
Dreamliner is sourced from outside the USA. These are sub-assemblies that feed the Boeing manufacturing process, and are made in places like Canada, Belgium, South Korea, France, Italy and the U.K. Commercial aircraft are also one of the largest export earnings generators for the USA economy. So if import tariffs are applied to these inputs to the Boeing manufacturing process guess what happens to Boeings competitive position against Airbus, and its ability to sell abroad...
Three other factoids to consider: a)70 percent of the value of USA exports are manufactured goods. b)In the last 25 years the value of USA exports to China has increased by a factor of 20 times. Exports to the rest of the world have increased over that same period by a factor of 3 times. c)twenty-five years ago China's share of USA goods imports was 5% and the rest of the Pacific Rim was 34%. Today China is about 18% and the rest of the Pacific Rim is down to 14% of total USA goods imports.
Finally, the biggest problem in the whole trend of declining manufacturing jobs (even as absolute manufacturing output continues to rise) is that over the past 25 years USA manufacturing labor productivity (and therefore permanent job destruction) has been increasing at 3 times the rate of USA service sector labor productivity. Quite simply, it is easier to improve the efficiency of a CAT, John Deere, Boeing, or auto vehicle manufacturing plant than it is to do the same with accountants, engineers, paralegals or Starbucks baristas. And THIS is the real issue we are all going to have to figure out how to deal with (re-patriating the making of men's underwear ain't gonna do nothin). For a really sobering read get a copy of Martin Ford's "Rise of the Robots".
(The majority of the statistics are from the Federal Reserve Bank of St. Louis database).
Apologies if this has turned into too lengthy a post. No, I don't live in Denver.