What happens when we do it to them?
China is powerful, sure. But they aren't more powerful than the western world. We'll win that fight. (Well, by "win" I mean suffer less damages).
Western companies are also already pretty cut off from the Chinese market. Cutting them off even more so is unlikely to have as huge if an impact as people are predicting.
You seem to be pretty uninformed on the matter. It is common knowledge that it is extremely difficult for Western companies to operate in China.
This "retaliation" has been going on for decades. China can't really make it much worse than what they have already been doing for decades.
You're saying that China has been retaliating by giving foreign companies access to cheap labor and hundreds of millions of customers. That's completely backwards.
Subsequently Asias reaction to absolutely do not do any business with Huawei as the US ambassador asked for was answered with "we know China is risky, but you guys don't come without strings attached either"[1][2][3]. Only Europe and places like Taiwan(because of obvious reasons) are blindly followed US foreign policy decisions.
Even UAE, Saudi Arabia and other places have now started to look for alternatives as they consider the US to less likely to follow through with their threats.
If ever SCO(Shanghai Cooperation Organisation[4]) the Chinese answer to NATO becomes more involved in the middle east the US and it's allies will have to worry. And it's happening right now albeit slowly, because the sanctions and my way or the highway isn't really a reliable partner to a lot of people anymore.
EDIT: economically there isn't much more than a complete trade embargo including central bank sanction that has been done with NK or Iran that can be done.
Politically a coup isn't likely to happen. The PRC is hugely popular among its citizens whether we like it or not.
And militarily Clinton humiliating China in 1996 prompted the current military buildup (See Taiwan straight crisis) [5]
It's basically the emperors naked clothes now as the US Navy realizes that their big aircraft carriers are also a big liability in modern conflict as they're basically vulnerable to swarm attacks by cheap junk[6]
[1] https://english.kyodonews.net/news/2019/08/840ce682b432-focu...
[2] https://www.japantimes.co.jp/news/2019/08/19/business/u-s-ba...
[3] https://www.scmp.com/week-asia/geopolitics/article/3006961/m...
[4] https://en.wikipedia.org/wiki/Shanghai_Cooperation_Organisat...
[5] https://en.wikipedia.org/wiki/Third_Taiwan_Strait_Crisis
[6] https://www.defensenews.com/naval/2019/08/06/with-mounting-q...
There’s MUCH more the US can do if they really wanted to. Consider:
1. China is an export-driven economy.
2. The majority of trade flows through ocean trade routes.
3. The US navy patrols and controls the majority of water routes around the world.
But, extreme escalation on either side could push this beyond an economic dispute and no party wants that.
Trump would benefit enormously from a shooting war.
Classic tools that they may actually consider include:
Dumping US treasuries. Making life for American companies difficult through regulations and inspections. Limiting rare earth exports.
All of these have a cost on them as well (just like how most American tools on China have a cost on America), so they are careful to implement them.
Also, I wouldn't be too quick to dismiss their ability to suffocate the us if they no longer have an economy to lose. They're certainly in a military and geographic position to enforce a trade blockade, one way or another. If china really wanted it, I think they'd be more than able to severely limit trade between asia and the us to the point of destroying large parts of the us economy.
Since China will likely not back down, I think an economic MAD will inevitably occur if the us insists on burning the only stick it can still use.
Successful military intervention is unlikely since china is a nuclear superpower with a strong army and an even stronger industrial backbone. They're not some defenseless third-world shithole.
I can't imagine it being long now, but china will eventually get to the tipping point were things start to go downhill for them. I bet china won't let it get to that point without retaliating for it's destroyed economy by thoroughly destroying the us economy while it still can.
I think we'll soon be seeing humanity's first economical MAD event.