> Isn't the point of sanctions to make the offending product so expensive that other options become more viable?

The key word here is other options. Are there any?

China on other hand has many other options than the US market. They will have no problem redirecting things like household goods, and other light industry products to other markets without impact to its industrial capacity.

That's what has happened in 2008, and indeed worked marvelously for them in the end.

When the American economy was flopped, they simply took all those luxuries destined for sale to America, dumped them on developing markets, and adjusted quality-quantity balance for this target market.