The only country that can rival the United States in economic, political, and military power is China . And Beijing's military threat to the U.S. is growing.

China continues to intimidate Taiwan , a longtime American friend and home of Taiwan Semiconductor, a pillar of the digital and artificial intelligence revolution .

China also continues to pursue false territorial claims against Japan and the Philippines, two stalwart treaty allies of the U.S. In a new development, China is also turning the screws on the U.S. economy by restricting access to rare earths, which are inputs into America’s electronic and digital infrastructure.

But what would war with China mean for different sectors of the U.S. economy? I wrote on this topic recently , but considering the rising prospect of a U.S.-China war, it's worth a deeper dive.

For a start, consider that over 1,000 U.S. companies have operations in China. China is an important source of revenue for many of the largest U.S. companies, including Apple, Caterpillar, John Deere, and Nike. Equally important, these and several hundred other U.S. companies use China as the source for their global supply chains. Unfortunately, most U.S. businesses have adopted a "head in the sand" policy regarding the possibility of war between the U.S. and China.

In the event of a hot war, U.S. corporations currently generating revenues from an enemy nation would experience dramatic revenue losses. The Street described the results of a Bank of America study last June. It showed that Wynn Resorts generates 70% of its revenues from China, Las Vegas Sands over 60%. Among semiconductor companies, Qualcomm, Texas Instruments, NXP, Qorvo, and Broadcom all generate over 30% of their revenues from China. General Motors sells over 3 million vehicles a year in China. Cummins Engine derives 40% of its revenues from China. Many of America’s most successful fast-food companies such as KFC, McDonald’s and Starbucks also have outsize exposure to China.

Companies should be reshoring or nearshoring. Companies should be contracting with America’s construction, engineering, materials, and logistics companies on bringing supply chains home or to near neighbors such as Mexico and Canada. In the short run, reconfiguring supply chains would be expensive, but in the medium term, five to 10 years, reshoring would lead to an economic boom for companies including Caterpillar, John Deere, Bechtel, Flour, Kiewit, UPX, and FedEx as well as materials companies such as Martin Marietta Materials, Vulcan Materials, and Weyerhaeuser.

The U.S. is blessed with abundant natural resources and world-class manufacturing and infrastructure companies. The U.S. has the ability to be an autarchic economy, almost completely self-sufficient. Rather than sending Treasury Secretary Janet Yellen to kowtow to Beijing, the Biden administration should be sounding a national alarm about reshoring and adopting an asset-light business model in China.

Why?

Because an economic and military typhoon is coming.

James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes  a daily note  on finance and the economy, politics, sociology, and criminal justice.