China has a playbook to counter Trump: 'Supply chain warfare'

Its status as world's factory floor lets it cut US firms off from critical resources

HONG KONG - In the world of cheap drones, Skydio was the great American hope. Its autonomous flying machines gave the US defense and police agencies an alternative to Chinese manufacturers, free from the security concerns tied to dependence on Chinese supply chains.

But Skydio's vulnerabilities came into sharp focus days before the US presidential election, when the Chinese authorities imposed sanctions and severed the company's access to essential battery supplies.

Overnight, the San Mateo, California-based Skydio, the largest American maker of drones, scrambled to find new suppliers. The move slowed Skydio's deliveries to its customers, which include the US military.

"This is an attack on Skydio but it's also an attack on you," chief executive Adam Bry told customers.

Behind the move was a message from China's leaders to Donald Trump, who would go on to win the election with a promise of new China sanctions and tariffs: Hit us, and we'll strike back harder.

From the campaign trail to his Cabinet appointments, Trump has made it clear that he believes a confrontation with China over trade and technology is inevitable.

In the first Trump administration, the Chinese government took mostly symbolic and equivalent measures following US tariffs and trade restrictions. This time, China is poised to escalate its responses, experts say, and could aim aggressive and targeted countermeasures at American companies.

"During Trade War 1.0, Beijing was fairly careful to meet the tariffs that the US put in place," said Mr Jude Blanchette, a China scholar at the Centre for Strategic and International Studies in Washington. "Now they are signaling their tolerance for accepting and dishing out pain," he said. "It's clear for political reasons that Beijing is not willing to stand by and watch as significant new waves of tariffs come in."