You seem convinced that the US goal in that situation is retaking Taiwan. What if they look at it, conclude it's impossible, and conduct a long-term attritional campaign against China instead?
Forget Taiwan exists because it's become nothing more than a red herring at this point. The war is between China and the US and the US homeland is outside China's reach. The reverse is very much not true. What is to be done about that? Any way it's sliced, a reasonable person must conclude that there is no way to have a limited conflict with the US. If the US can no longer keep Taiwan out of the PRC's hands, it will expand the scope of the conflict to places the PLA can't reach. Is China ready to deal with a stoppage of all oil from the Middle East? Is it ready for zero trade with Europe? Is it ready for zero shipping outside its immediate environs? Is it ready for a years-long bombing campaign against sensitive and critical industrial targets?
Until it's ready to deal with the US throughout the world, any war should be forestalled.
It's not a smaller scale victory, it's a slow road to ruin. And the US doesn't have any dagger pressed against China's belly; the only dagger pressed against China's belly is the one it holds itself - it's called 1.4%. I needn't remind you that it's a position you vehemently support and I wonder if recent events have caused you to reassess it.
The question of "what happens the day after" applies to Taiwan itself. Does Taiwan gain some magical immunity if it even goes so far as declaring independence? Is that game, set, and match? Does China reach across the table and shake its hand? Of course not. China always defines the scope, aims, and objectives of any cross-Strait military operation. If China can't be invaded, it's blockaded. If it can't be blockaded, it's bombed to rubble. If it can't be bombed to rubble, it's struck with nuclear weapons. China is always in the driver's seat no matter what Taiwan does and it should never give that away.
The war happens on China's timetable, no one else's.
There is no slow attrition strategy possible against a larger country with way bigger industry and economy. Its like thinking Imperial Japan could have just slowly attrited USA down in ww2. Even the Japanese admirals were not that insane.
US stopping all oil from the middle East? So in other words, US will open a new front in Iran, Saudi Arabia and Pakistan? Who combined have armies totaling more than a million men?
Zero trade with Europe? So America will also feed, give medicine and clothe the Europeans when winter comes? With goods from where?
Bombing campaign using what? The only thing that has a high chance of getting a few hits in without the pilot kamikazing is a B2 with Jassm. Where will the semiconductors and money to build that many Jassm come from? How many B2s are there in total and how fast can US industry replace them as they're getting hunted down?
If US doesn't win the decisive war and destroy the Navy quickly so they can land on Taiwan, China will switch to war time industry and rapidly build out new platforms. The US economy is far more crippled without access to China than vice versa, especially since any industry China lost because of reduced trade with Europe can be retooled to make bombers, bombs and missiles.
Then, its just a matter of island hopping using China's industrial might. If US makes the fight global, they paint a target on every base they have.
If they're using Korea to launch attacks, China can invade it and hand the keys over to Kim.
If after that they're using Japan to launch attacks, China can spend awhile printing out missiles, reduce all Japanese infrastructure to rubble, then jointly invade with Russia.
If after that they're using Pacific Islands to launch attacks, China will redirect every shipyard to the military, like America did in ww2, train another million troops and then wrest them island by island.
This will continue until the mainland US is reached, and a peace agreement signed to prevent all out nuclear war.
Edit: in fact, just consider the question of semiconductors needed for all forms of military tech alone. China controls the raw material supply almost completely, semiconductors themselves are split roughly evenly between Mainland China, Taiwan China and South Korea. When war breaks out, Taiwan will be ordered to cease all deliveries to America, and South Korea, if they join the war will get completely flattened. Even if Kim throws and China doesn't invade in force, SK will be bombed out and in no position to make semiconductors. That means effectively, as war starts China will be the only country in the world even capable of making semiconductors on a large scale, and therefore the only one that can replenish modern goods and advanced weapons in the long run.