Trump’s tough trade talk makes US firms fear China retribution

US President-elect Donald Trump’s challenges to China on trade and Taiwan are rattling American companies who have long benefited from stable relations between the two countries but now fear retaliation by Beijing if Trump were to act.

Reuters reports that Trump jarred Chinese officials on Sunday by saying the United States did not necessarily have to stick to its long-standing position that Taiwan is part of “one China.” Beijing expressed “serious concern” about Trump’s remarks.

Four US industry sources who follow China policy closely said they were unsettled by any suggestion of abandoning the “one China” policy, which they said had served the business community well for several decades.

The sources, who spoke on condition of anonymity because of the sensitivity of the issue, stressed the importance of stability for businesses. They said Beijing could retaliate against US companies that do business in China if Trump takes his tougher line too far.

“The Chinese are deeply concerned and we hear now from reliable sources in Beijing who suggest the Chinese government, the Communist Party, are developing lists of US interests against which they could retaliate, commercial interests, and obviously one merely has to look at top US exports to China to get a quick sense of whose heads may be on the chopping block,” said one China trade policy expert who interacts closely with U.S. business.

The expert pointed out that more than 30 states have over $1 billion in exports to China and that there is over $500 billion in commercial engagements by U.S. companies in China.

All of that would be at risk if China retaliated.

“That commercial engagement supports American jobs, many American jobs here in the United States,” the expert said.

Another source said there had been “quiet outreach” by the U.S. business community to Trump’s advisers but companies were wary of discussing their concerns about the China policy publicly for fear of becoming a target for the president-elect, who has singled out companies such as Carrier and Boeing.

From Detroit’s car makers to Silicon Valley’s technology champions, China is both a critical source of revenue and profits, and a vital link in global supply chains.

More than four decades after President Richard Nixon upset the status quo of his time with a surprise visit to Beijing, what’s good for US-China relations is good for General Motors and Starbucks and Apple and Wal-Mart Stores Inc.

China has hit US goods with retaliatory tariffs in the past when disputes flared. China in 2011 slapped duties on US-made large cars and sport utilities as part of a trade dispute.

The stakes are higher now.

More than one-third of the 9.96 million vehicles General Motors Co sold globally in 2015 were delivered to Chinese customers.

Profits from Chinese operations, including joint ventures, accounted for about 20 percent of GM’s global net income of $9.7 billion in 2015. Ford Motor Co’s China JVs  represented about 16 percent of its global pre-tax profit of $9.4 billion in 2015.