There's half the solution to the trade deficit: STOP BUYING CHEAP GARBAGE.
This is just a special case of the bigger maxim: CAREFULLY CONSIDER THE LONG-TERM EFFECTS OF EVRYTHING YOU DO. Evidently the Chinese have carefully considered the long-term effects of selling garbage to fat westerners. We can beat them at their game by considering the long- term effects of properly managing our resources and the environment. There's a lot of money to be made in self-denial.