I understand that the US was afraid of Chinese intervention in the war but wouldn't the US be able to claim that the NVA attacking the US and SVA forces in the South as an outright declaration of war?
In theory, yes, but there are many ways this argument can go. One thing we have to consider is that General Westmoreland was claiming the NVA was on the verge of defeat for years. If a group supposedly on the edge of defeat could do this, were they really on the edge of defeat? This single event turned the media against the war, who then began openly criticizing the war. Any invasion at that point would have been political suicide for Johnson. There was fear of China getting involved, and, by extension, the Soviet Union. If the Soviets were involve, the war would take on a new meaning, and people were afraid of nuclear weapons being launched. Lastly, and this is purely my opinion as a historian, is that people were sick of war. Keep in mind that many people at this point bad experienced both World Wars. Most did not want to see another World War and would not have supported a full invasion. Plus, we have to remember the goal of Vietnam was containment. This means a limited war, at best, with a shaky outcome. Hope this helped.