Considering past consequences, how important is it for nations to stand firm on their warnings to others, and what should be the limit of compromise?

If China wants to test the US they can go ahead. While I think war is entirely unnecessary and that our leaders should be able to come to agreements like the civilized adults we elected them to be, if China thinks they can disrespect the US's clear boundaries then they better think again, we have the highest funded and the best military in the world, not to mention we are part of the NATO alliance and China isn't so if we go to war with China they are going to war against all of the countries in NATO.