We've been doing that for the last 20 years or so. That's the essence of Rubin's strong dollar policy in general, and our interactions with China in particular.
The only drawback is that you build up a big imbalance (in this case in the form of zero personal savings plus noticeable interest payments on the national debt). That's not really a sustainable situation; the only question is when and why and how things will change. http://mpettis.com/2011/07/current-account-dilemma/ has some discussion on this. The US may well have an interest in somewhat controlling how the imbalance is unwound when it unwinds.
Changing the trade balance unilaterally from the US point of view is somewhat difficult if China is really insistent on maintaining it. We can impose tariffs (though we'd have to sell them to the WTO) and we can try to get China to stop messing with the exchange rate, but all China has to do is subsidize its exporters enough to overcome those issues (e.g. give them enough money that they can give US consumers large post-purchase rebates that are larger than the tariff amount). The only way to really prevent that is to either ban those imports altogether or to make the required subsidy more painful than China is willing to do... or to convince the Chinese authorities that doing what they're doing is stupid. Which is hard, because they're doing rational things that help them stay in power, and to hell with what will happen to the Chinese economy in 10-15 years.
We've been doing that for the last 20 years or so. That's the essence of Rubin's strong dollar policy in general, and our interactions with China in particular.
The only drawback is that you build up a big imbalance (in this case in the form of zero personal savings plus noticeable interest payments on the national debt). That's not really a sustainable situation; the only question is when and why and how things will change. http://mpettis.com/2011/07/current-account-dilemma/ has some discussion on this. The US may well have an interest in somewhat controlling how the imbalance is unwound when it unwinds.
Changing the trade balance unilaterally from the US point of view is somewhat difficult if China is really insistent on maintaining it. We can impose tariffs (though we'd have to sell them to the WTO) and we can try to get China to stop messing with the exchange rate, but all China has to do is subsidize its exporters enough to overcome those issues (e.g. give them enough money that they can give US consumers large post-purchase rebates that are larger than the tariff amount). The only way to really prevent that is to either ban those imports altogether or to make the required subsidy more painful than China is willing to do... or to convince the Chinese authorities that doing what they're doing is stupid. Which is hard, because they're doing rational things that help them stay in power, and to hell with what will happen to the Chinese economy in 10-15 years.