Timothy Geithner was sitting in his spacious Treasury Department office overlooking the White House earlier this month, mulling the U.S.'s sometimes testy relationship with China. The view wasn't great: China was flexing its military muscles, sticking to a hard line on the valuation of its currency and generally making everyone in Washington jumpy as the state visit by President Hu Jintao approached. Is a trade war possible? Geithner was asked. "A very low probability," he replied, "and I think it's completely avoidable.