The speaker they had on said that China saying they won't increase further means they're going to start using the other tools in their arsenal, which in a trade war is not going to be nice.
China owns a bit under a trillion USD of US Treasury bonds, that is to say, debt. If they decide to liquidate it, that's enough to seriously affect the value of those bonds, and therefore the US's ability to borrow more money, and from there, the value of the dollar.