Why do we let China dictate so much

WHAT: US decides not to sell Taiwan F16 C/Ds
WHY: China
WHERE: US and Asia
WHEN: Unofficially Sunday, Officially Wednesday 9/21/2011
A signal of mixed results when the Obama administration decides not to sell the newer jets, built in Texas, to the Taiwan government. Instead of the F16 C/D model, the US offers to upgrade the F16 A/Bs that Taiwan has now. This action does not appeal to the government that has been described as "a democratic bastion and long-standing security partner" in Asia. At the same time the selling of the D/Cs would evoke the ire of the Chinese government. Since China has a substantial amount of US debt, what else could the US government do?
Taiwan is in the worlds view not a separate country from China, which split during the civil war that brought communism to the worlds most populated country. The 23 million citizens of Taiwan live in a democracy supported by the US for nearly 6 decades. The US military holds joint exercises almost annually sometimes in conjunction with Japan. So why do we let China dictate our foreign policy in Asia? The answer is as complex as any foreign relations question but as simple as economics. We being China's largest trading partner is the simple answer. Since the trade balance always favors China, with the Chinese holding so much of our debt, could a turn of the spigot to slow trade cause tensions to increase? Putting tariffs on Chinese goods so they are not so cheap signal that we will not let China dictate what we do and when we do it? Would tariffs do anyone any good? Wal Mart would certainly object to tariffs.
As a citizen that feels the United States and its citizens should always be our number one consideration. Walk softly and carry a big stick will not work but insuring that Americans have jobs and a good standard of living should always be priority #1.