How much will taxpayers shoulder?

[Jester]

Then again, it's a free market, not?

This is rather the point, isn't it? Chinese markets aren't free, not internally nor externally, which is what lets them do what they do with their currency. A free market would forbid capital controls. Either they would have to fix their currency and forego any ability to manipulate their economy with it, or float their currency and let the markets take it where they will.

The real problem is that the USA is no longer a producing nation.

Then nobody is. China just passed the US this year as the world's leading manufacturer, and they have over four times the population. Per capita, and in total, the US is still the largest economy in the world, twice the size of the Chinese economy.

-Jester