The United States turns its military into a much smaller force by switching its priorities to domestic matters, starting with using the U.S. military budget to fill the gap in Social Security's trust fund left there by past Congresses and presidents who spent the money on other things, and continuing onward in the same theme.
China begins to conquer Eurasia to such an extent that it reaches the borders of the European Union in the west.
With most of Asia under its domination, including Japan, everyone assumes that China is coming for Europe next, but China uses a strategy of misdirection to make the Europeans think it will invade Western Europe, and it actually pins the European naval force in the Mediterranean and blockades it, which neutralizes it as a threat without the cost of invasion.
The U.S. must make a decision as the Chinese invasion forces in Central America gather steam: to build traditional naval super-carriers to meet the new Chinese ones or to build highly-experimental arsenal ships that can fire thousands of missiles at once, shower its target with overwhelming force, and have a crew of only around 100 because of the extent of automation.
He is convinced that any nuclear strike will lead to a series of escalating exchanges and will leave both countries so destroyed that neither side can achieve any victory.