Originally posted by: Rainsford
I don't think so. We have a choice in who we buy from, the price we pay for a lot of goods would almost certainly go up, but we are a wealthy country (relativly speaking), the price increases would not be crippling, and would probably be short lived in any case as other countries would gladly take up the slack. But it doesn't really work the other way around, excess supply is far more damaging for the supplier than excess demand is for the consumer, when demand exceeds supply by a large margin, economic theory suggests than supply will shift to meet demand. When supply exceeds demand, however, more demand will not magically be created to make up for it. Communism essentially proved that you can't have a supply driven economy, it simply doesn't work. Obviously supply is necessary in a healthy economic system, but it's the tail, not the dog.
Although getting advice from Tom Clancy books generally only works if you are President Reagan, "The Bear and the Dragon" contains a very relevant point about a theoretical cut off of trade with China...we can buy from any number of sources, although at a slightly higher price, while there is only one United States of America to sell to...it is easier to find alternative sources of the products China makes for us than it is for them to find alternative buyers. A big part of that is that they don't sell us anything specialized, nothing we'd have trouble getting anywhere else. Your Dell may be made in China, but Taiwan, Korea, India, etc, would be happy to start taking orders.