China could really screw with us if they wanted to. So we impose tarrifs, China responds by raising prices .....or calling in debts,
China can’t call in debts. They hold US treasuries that come due at specific dates. And they are reducing their holdings of that.
The best thing that could happen is that we start weaning ourselves of Chinese imports. And do you really think they’d do anything to stop the flow of around $375 billion in exports to the US annually, and all that technology they copy for free when US firms locate there?
That’s why they keep their currency undervalued so they can continue the export business which finances their growth. They do just what Japan did and eat any currency fluctuations (or they avoid them) to keep the exports flowing.
We hold the power over China if enough could just clear their heads and realize it. We owe them around $1 trillion, which is about 1/16 of the total. Most of the debt is owned to Americans and Americans entities.