The United States Constitution, Article I, Section 8:
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;...To regulate Commerce with foreign Nations,...”
The Tariff Act of 1789 was the first national source of revenue for the newly formed United States.
I'm sure that worked just fine during the first half century of our nation's existence, when our government was so small that it could barely carry out its constitutional obligations.
There wasn't much that America needed in the way of imported goods in those days, so what little tax was raised on the goods that were imported into the US, was probably sufficient to fund the government.
It's not a good argument to increase tariffs today, when nearly all the commerce of the globe is interconnected, and national economies are so interlocked with one another.
As for Caterpillar, they sell their equipment all over the world. If China wants to protect their domestic heavy equipment manufacturers with high tariffs on foreign equipment makers, so be it. Their purchasing public is just going to be punished for buying the better quality foreign-made equipment. It's their loss. Caterpillar is likely doing just fine in countries that don't impose such punitive tariffs.