China readies itself for trade war: China has lined up countermeasures to retaliate against US companies in the case that President-elect Donald Trump decides to ratchet up the trade war with increased tariffs, Beijing advisers and international risk analysts told the Financial Times on Thursday.

(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)

REMEMBER- The world is gearing up for US President-elect Donald Trump’s potential trade war, which could see a 10 to 20% tariff on imports from all foreign countries and an additional 60 to 100% tariff on imports specifically from China, with several logistics players urged to front load their shipments ahead of any changes in tariff policy.

Striking back: China has incorporated new laws that allow it to blacklist foreign firms, through an “unreliable entity list,” and impose its own sanctions. An expanded export control law allows Beijing to leverage its global dominance in supplying key resources, such as rare earths and lithium, which are essential for modern technologies, as a strategic tool. “China will of course try to engage with President Trump [and] in whatever way, try to negotiate,” Peking University's Global Cooperation and Understanding Institute executive director Wang Dong told the news outlet. “But if, as happened in 2018, nothing can be achieved through talks and we have to fight, we will resolutely defend China’s rights and interests,” Dong added.

Raising the stakes: China imposed sanctions last month on US drone maker Skydio, a supplier to Ukraine’s military, which prevented Chinese groups from supplying the firm with critical parts. The country has also threatened to place clothing conglomerate PVH on its unreliable entity list, barring a slew of brands from access to the Chinese market.

China isn’t alone: The US's potential tariff hike threatens several Asian players other than China, including South Korea, Taiwan, Vietnam, Japan and India. The US bilateral trade deficit with China has somewhat decreased since the Trump administration; however, deficits with other Asian exporters have risen considerably and may face greater scrutiny.

Could this be in China’s favor? If Trump delivers on his pledged protectionist policies, countries may be swayed towards fostering greater ties with China. “Should other major economies begin to view the US as an unreliable trade partner they could seek to cultivate deeper trade ties with China in search of more favorable export markets,” Beijing-based consultancy group Trivium analyst Joe Mazur told FT.

Tags: