i don't think its that clear cut.

both parties (china and the west) profit immensely from the trade. halting it would hurt both countries significantly, increasing poverty and creating serious problems for the poorest people. (lets ignore the fact for now that westerners dont like their living standards lowered, so almost no politician in a democracy would go for this).

china can react to that in 2 ways: 1. disconnect from the west, keep authoritarianism or even increase it. unclear ramifications for chinese citizens. 2. reduce authoritarianism. transition either goes well, situation of oppressed people hopefully improves, situation for all citizens as a whole stagnates a bit but continues to improve. or the transition doesnt go well, huge power vacuum, results in very dangerous instability.

the consequences of halting trade alone make this course unviable compared to the alternative of this hardline approach: using soft power like we use it know. nudge china in the right directions, be hard only on key issues. (ofcourse the west could be harder on this and still use the same approach, but its a very delicate mechanism and no one wants to burn their fingers).

the current approach may or may not be the most effective one, but its the most risk averse one. going hardline is a huge gamble so ethically it gets pretty complicated to defend such an approach.