Really, I’m honestly looking for alternatives, not saying you’re wrong. How do we get out from this situation?
Get together with close allies (Europe, Japan, Korea, Australia, etc.) and decide to run afoul of the WTO. Favor domestic and close partners though heavy subsidies. This will upset the global balance of trade, treaties, etc. and will cause international tensions to rise, but it'll have to be done.
Build domestic factories in a special economic zone. Staff them with lots of immigrants and provide free education, child support, low cost of living, and a guaranteed path to citizenship. Open the flood gates, because we'll need lots of people.
Companies that build these factories get thirty years of 100% tax exemptions. Companies that source from them get lower taxes too.
If China complains, cut off the food and energy exports. It's their weakness and they'll step in line.
Are there any glaring flaws in this plan?