Len, that is really terrible news. I am in manufacturing (15 years), and I'm constantly worried that our business will dry up and leave me looking for a job at Mickey D's. In fact, our largest job shop customer (75% of total job shop revenue) last year decided that they could have their parts made in China as well. It hurt, but fortunately our proprietary parts have been selling really well.
One thing that we have to our advantage is our ability to bring a product to market very quickly. Sure, cheaper copies will come out of China in a couple of years, but by that time we are already on to the next thing. Hopefully your shop can find another (preferably niche) market and head in a slightly different direction. Identify what you do better than any of your competitors, and deliver.
On a related note, I still remember the post about your son, the "machine operator." Seems like he's got a real knack for that sort of thing, and you should be proud.
Best of luck to you, your family, and your business.
Jim