China and USA economies are intricately linked.
China relies very, very heavily on energy imports. And imports of raw materials to built its future roads, battle ships, cities, islands, etc.
I mean, if the massive (massive!) imports of coal and iron ore were to be limited, would that spell the end of the Xi era? And similarly, that would immediately damage other world economies. Not to mention all the imports the world lazily expects from China - the worlds industrial centre.
If some type of aggressive event did happen (from either side) around Taiwan, or the South China Sea, what happens to trade?
Is there actually any luxury here to end trade out of protest? Or is that just impossible?
There's no set logic to the event, as it would be more like a chain of smaller-scope events which currently sit on loosely-connected probability chains, and everything would play out at different time scales.
Trade itself would suffer initially from the volatility-discovery portion. Lots of ups and downs and fears / fear-release events over resources and trade balance.
Day by day and week by week you'd start to see different stories emerge. Interestingly, a lot of those stories will be less about who has how much of what--but about "new fears coming out" about those things. So it will be very difficult to predict, and the story that comes out may in fact have little to do with who really has which resources.
This will be more especially true as things change initially.
Also, big traders and market-watchers currently know, and can intuit, a lot more about China's internals than people may understand. Many of them have spent a lot of time in China or working closely with Chinese banks and so on.
So a considerable amount of the probability of given issues with things like PRC market fidelity is already priced in, contrary to what people may think. Naturally this is also true of the US and various markets. This is one reason why it's a very good idea to check objective levels, directions, oscillations, and so on before entering or changing an investing position during hard times.
Outcomes also really depend on time scales and rely on positional logic. There will be people looking to short everything, there will be perma-bulls, you name it.
Finally you've got relative levels of stability and growth to look at, like given this platform or that, which one seems wis_er_ for your money, not "which one will lose this conflict" so much, since one can't really know that, or the answer may be complex.
If you're an investor, and you want to be smart about this kind of thing, it can be a good idea to look for general positions you want to target that are relevant for your time scope. Get as subjective as possible--your needs, your fears, your expectations. Then fold in more objective states of things, using objective tools. You'll start to see places you want to start to build positions, like Apple under X, Ford under Y, or whatever. You can use tools like simple moving averages and bollinger bands to help sort this out. There will be positions that fit your outlook better and some that fit worse. (This is general advice, always DYOR)
(What the hell did I write this for...? ...Hello? Lmao)