I've been importing from Asia for about 25 years, so I feel I have a good grasp of China's economy, a good part of my business depends on it.

We don't have a $500 bil trade def with China, it's more like 365-370 billion. Also, China is our third largest export market. That would be quite a blow to the US economy if it were cut off. We might not be able to weather that.

In addition we have a services trade surplus with China, currently running about $30 billion.(Then of course, we have US FDI in China corporate stocks, currently about $70 billion. )

Now, of course, many of the dollars from deficit actually do flow back into the US, through things such as real estate. 'Trade deficit' may sound horrible, but it seems widely misunderstood.