They're betting, based on on displayed political will, that we are a bunch of woosies.

They know that kicking the dollar into the gutter will create a world-wide economic crisis event not rivalled since the 1920/30s. They also know that they'll take it on the chin too. They don't really want that.

What they believe, however, is that we fear such privations more than they and that we will, therefore, back off on this pressure to re-value the yuan and/or shut up about our stupid copyrights and let them make what they want when they want it and how.

This isn't completely a bluff, they're just betting that we don't have the stones to call at these stakes.

Heavens, all they really need is for the USA to back off for about 15 months -- and then they can be reasonably sure that the new occupant of the oval will not pick up this ball and run with it. It's an easier bet to make when you win simply by making the other person pause for a while -- they don't have to win outright.