The US sent an Aircraft Carrier battle group to the region because of these tensions:
https://www.reuters.com/article/us-southchinasea-usa/u-s-car... (Jan 24, 2021)
A single US aircraft carrier is accompanied by a strike force of (IIRC) dozens of other ships, one or more submarines, anti-ship cruisers, anti-aircraft cruisers, and anti-submarine cruisers, logistics, etc. They carry a large number of aircraft and those aircraft have considerable strike capabilities, including the ability to attack enemy craft and ships from over the horizon; same with the ships. It's also worth remembering the large (permanent) US military presence in Japan, South Korea, Guam, and other nearby locations. Guam has been described as a permanently located US aircraft carrier combined with a military base.
I'm not an expert on Asian relations, tensions, or the military situation. I feel disappointed Obama's attempt to set up a trade block was nuked by the republicans for apparent partisans reasons. Now China is leading the same. That doesn't mean the US will allow China's expansionism to go unchecked. Part of US's activities in the region are to explicitly violate China's new claims of "sovereignty" around the islands they're building to expand their territory by sailing through those areas and flying planes over, and essentially daring China to do something about it. "We don't respect your claims at expanded borders."
Biden is clearly taking the threat seriously. FTA above:
> Biden’s nominee for secretary of state, Antony Blinken, told his Senate confirmation hearing on Tuesday there was “no doubt” China posed the most significant challenge to the United States of any nation.
I haven't studied China's military strength but I doubt it could contest the US in a traditional modern conflict. In a ground war maybe, but when we're talking navy and air power, the US likely has a substantial lead. And the US's goal would not be to invade China (at least not its mainland or traditionally recognized sovereign territories but simply to contain; though I could potentially see bombing or invading the islands that China is building in the ocean if there was some compelling reason for this.)
I personally am not well informed enough on the issue to understand why it's so sensitive that they want to build some islands in the sea near their mainland; perhaps the US simply wants countries to stick to their existing borders and not attempt expansionism like took place in decades and centuries past. Or perhaps it's as simple as the US doesn't want to accept countries expanding their territory and territorial waters by building islands in the ocean -- where would it stop?
China officially has a policy of "no nuclear first-strike" (which is not a policy US has adopted), but I can't imagine the US using nuclear weapons in this day and age, even in a conflict with another nuclear superpower (unless they were invading our mainland), so military action if it occurs is likely to take the form (I hypothesize) of skirmishes between ships and airplanes -- not necessarily fighting but flying really close, or playing chicken, that sort of thing; similar to what's been going on with Russian planes (whether both sides accuse the other of being reckless). Possibly with occasional shots fired by one side or the other before commanders on both sides order the troops to back off, because no one wants open war.
In the meantime it looks like the US is allowing China to build the islands but is refusing to recognize the new territory as sovereign land/waters, by sailing through it, flying over it, etc. Similar to the US's position on Iran and the Straight of Hormuz: it's international waters and Iran has no right to stop ships from sailing through it. The US demonstrates and enforces this by sailing its own ships through regularly and daring anyone to stop them.
The question may come down to whether China is willing to use military force to enforce its claims about sovereignty of the territory. That would be a massive step for them to take. China only has 2 aircraft carriers in service and it's unlikely their warplanes would be a match for the combination of all of the US's latest technology. China does have modern 5th generation stealth aircraft but I'm skeptical they could maintain air superiority against the entirety of US assets.
Like a law that's never been tested in court, we won't know how the militaries actually match up unless they go to battle.