In 1916, there was a serious crisis in US-British relations. The natural effect of the temporary removal of the danger of a US-German war (after the *Sussex* pledge) was to focus US attention on British violations of US neutral rights. And added to this was US resentment of the severity of British measures in crushing the rebellion in Ireland (even some Anglophiles protested). During this period, Wilson, in Arthur S. Link's words, "began to move in a really menacing way to defend alleged American neutral rights in the face of the new British maritime measures. No longer couched in friendly terms, the State Department's protests now accused the London government of 'lawless' conduct and warned that the United States would not tolerate the continuation of 'repeated violations of international law.' To give teeth to these warnings, Wilson obtained legislation from Congress in early September empowering him to deny clearance and port facilities to ships of any nation that discriminated against American commerce, and to use the armed forces to enforce the prohibition. In addition, he persuaded the Federal Reserve Board to warn American bankers to exercise caution in financing the war trade with the Allies. The consequences of this new sternness--a sharp increase in Anglo-American tension and vigorous protests from London--were also a calculated component of Wilson's plan. His grand objective was independent mediation, and such mediation would be possible only from a posture of severe neutrality. In other words, mediation could succeed only if the President convinced the British that he meant to use his powers of retaliation to force them to co-operate, and the Germans that he was determined to compel as much respect for American rights from their enemies as he had from them."
https://archive.org/stream/recentamericacon000608mbp/recentamericacon000608mbp_djvu.txt
Link also writes (in *Woodrow Wilson and the Progressive Era 1910-1917*, p. 253):
"It is no exaggeration to say that official Anglo-American relations reached the point of highest tension during the critical period from November, 1916, through the following January. This was true, not only because of the tightening of British economic controls, but also because of the refusal of the British to co-operate in the German and American peace drives. It is perhaps conjectural to say that the two countries were heading toward a break in relations, yet such a catastrophe was not impossible. On November 24, for example, Wilson asked Colonel House to tell Sir Edward Grey that Americans 'were growing more and more impatient with the intolerable conditions of neutrality, their feeling as hot against Great Britain as it was at first against Germany and likely to grow hotter still against an indefinite continuation of the war.'"
Link continues on pp. 256-7: "As soon as his re-election was beyond doubt, the President summoned House to Washington and on November 14 told him that, in order to avert the necessity of American intervention, he planned to demand that the war be ended. House protested that such a move would be highly prejudicial to the Allies. The following morning Wilson announced he had made up his mind to move for peace. But what if Germany agreed to a reasonable settlement and the Allies refused? House asked. In that case, would not the United States drift into a sympathetic alliance with Germany? Might not France and Britain declare war on the United States? If the Allies wanted war, Wilson replied, he would not shrink from it." [1]
https://archive.org/stream/woodrowwilsonand007665mbp/woodrowwilsonand007665mbp_djvu.txt
Of course, all this was contingent on Germany agreeing to reasonable peace terms. This may seem ASB territory, but I have often wondered if Germany (besides refraining from unrestricted submarine warfare) could have agreed to reasonable *sounding* (at least to Wilson) peace proposals, which they would nevertheless know the Allies could not accept. (Yet the German government's room for maneuver here was limited: even pseudo-moderation on its part would outrage the more nationalist elements in Germany.) Even if this were possible, though, I doubt that it would lead to an outright war between the US and the Allies--more likely to a neutrality much more favorable to the Central Powers than had been the case previously--e.g., an arms embargo, a ban on loans to belligerents, etc. Of course, the Allies could theoretically reply to this by declaring war on the US but it's hard to see what, other than emotional venting, they would gain by doing so.
[1] "He [Wilson] thought they would not dare resort to this and if they did, they could do this country no serious hurt. I disagreed with him again. I thought Great Britain might conceivably destroy our fleet and land troops from Japan in sufficient numbers to hold certain parts of the United States. He replied they might get a good distance but would have to stop somewhere, to which I agreed." House Diary, November 15, 1916
