 Bloomberg -- The U.S. and China are moving beyond bellicose trade threats to exchanging regulatory punches that threaten a wide range of industries including technology, energy and air travel.The two countries have blacklisted each others companies, barred flights and expelled journalists. The unfolding skirmish is starting to make companies nervous the trading landscape could shift out from under them.There are many industries where U.S. companies have made long-term bets on Chinas future because the market is so promising and so big, said Myron Brilliant, the U.S. Chamber of Commerces head of international affairs. Now, theyre recognizing the risk.China will look to avoid measures that could backfire, said Shi Yinhong, an adviser to the nations cabinet and a professor of international relations at Renmin University in Beijing. Any sanctions on U.S. companies would be a last resort because China is in desperate need of foreign investment from rich countries for both economic and political reasons.Nevertheless, pressure is only expected to intensify ahead of the U.S. elections in November, as President Donald Trump and presumptive Democratic nominee Joe Biden joust over who will take a tougher line on China.Trump has blamed China for covering up the coronavirus pandemic he has mocked as Kung Flu, accused Beijing of illicit espionage to steal our industrial secrets and threatened the U.S. could pursue a complete decoupling from the country. Biden, likewise, has described President Xi Jinping as a thug, labeled mass detention of Uighur Muslims as unconscionable and accused China of predatory trade practices.And on Capitol Hill, Republicans and Democrats have found rare unity in their opposition to China, with lawmakers eager to take action against Beijing for its handling of Covid-19, forced technology transfers, human rights abuses and its tightening grip on Hong Kong.China is going to be a punching bag in the campaign, said Capital Alpha Partners Byron Callan. But China is a punching bag that can punch back.China has repeatedly rejected U.S. accusations over its handling of the pandemic, Uighurs, Hong Kong and trade, and it has fired back at the Trump administration for undermining global cooperation and seeking to start a new cold war. Foreign Minister Wang Yi last month said China had no interest in replacing the U.S. as a hegemonic power, while adding that the U.S. should give up its wishful thinking of changing the country.Both sides have already taken a series of regulatory moves aimed at protecting market share.The U.S. is citing security concerns in blocking China Mobile Ltd., the worlds largest mobile operator, from entering the U.S. market. Its culling Chinese-made drones from government fleets and discouraging the deployment of Chinese transformers on the power grid. The Trump administration has also tried to constrain the global reach of Chinas Huawei Technologies Co., the worlds largest telecommunications equipment manufacturer.Meanwhile, China prevented U.S. airline flights into the country for more than two months and, after the U.S. imposed visa restrictions on Chinese journalists, it expelled American journalists. It has stepped up its scrutiny of U.S. companies, with Chinas state news agency casting one probe as a warning to the White House. China also has long made it difficult for U.S. telecommunications companies to enter its market, requiring overseas operators to co-invest with local firms and requiring authorization by the central government.One of the most combustible flash points has been the Trump administrations campaign to contain Huawei by seeking to limit the companys business in the U.S. and push allies to shun its gear in their networks.The U.S. Federal Communications Commission moved to block devices made by Huawei and ZTE Corp. from being used in U.S. networks. And the Commerce Department has placed Huawei on blacklists aimed at preventing the Chinese company from using U.S. technology for the chips that power its network gear, including tech from suppliers Qualcomm Inc. and Broadcom Inc.After suppliers found work-arounds, Commerce in May tightened rules to bar any chipmaker using American equipment from selling to Huawei without U.S. approval. The step could constrain virtually the entire contract chipmaking industry, which uses equipment from U.S. vendors such as Applied Materials Inc., Lam Research Corp. and KLA Corp. in wafer fabrication plants.The curbs also threaten to cripple Huawei. Although the company can buy off-the-shelf or commodity mobile chips from a third party such as Samsung Electronics Co. or MediaTek Inc., going that route would force it to make costly compromises on performance in basic products.Huawei was on a list the Pentagon unveiled last week of companies it says are owned or controlled by Chinas military, opening them to increased scrutiny. The Ministry of Foreign Affairs in Beijing accused the Trump administration of violating the very market economy principle the U.S. champions.We are strongly opposed to this, the foreign ministry said Sunday of the Pentagons designation. China urges the U.S. to stop suppressing Chinese companies without reason and provide a fair, just and non-discriminatory environment for Chinese companies to operate normally in the U.S.After the new restrictions, the editor of the Communist Partys Global Times newspaper tweeted that China would retaliate using an unreliable entities list that it first threatened at the height of the trade war last year. Although China didnt identify companies on the list, the Global Times has cited a source close to the Chinese government as saying U.S. bellwethers such as Apple Inc. and Qualcomm could be targeted.The fallout could extend to companies heavily reliant on Chinese supply chains, as well consumer-facing brands eager to expand sales in Asia. Boeing Co., which recorded 5.7 billion of revenue from China in 2019, and Tesla Inc., the biggest U.S. carmaker operating independently in China, are among companies most exposed if relations sour further.Were playing in a much wider field now, said Jim Lucier, managing director of research firm Capital Alpha Partners. Were not simply talking about you tariff me and I tariff you. The playing field is virtually unlimited.Planes and AutomobilesU.S. automakers have also been singed. In June, China fined Ford Motor Co.s main joint venture in the country for antitrust violations, saying Changan Ford Automobile Co. had restricted retailers sale prices since 2013.Aviation has been another source of tension, as both countries squabble over access to their skies. Chinas decision to limit U.S. airlines operations to those services scheduled as of March 12 hurt carriers such as United Airlines Holdings Inc., Delta Air Lines Inc, and American Airlines Group Inc. that had suspended passenger flights to and from China because of the coronavirus pandemic.The U.S. responded earlier this month by initially threatening to ban all flights from China, then relenting to allow two flights weekly once Chinese officials eased their restrictions. Now, in what appears to be a staged de-escalation, China gave U.S. passenger carriers permission to operate four weekly flights to the country and earlier this month, the Trump administration matched the move by also authorizing four flights from Chinese airlines.Its happening outside of aviation too. Consider the U.S. governments decision to seize a half-ton, Chinese-made electrical transformer when it arrived at an American port last year and divert the gear to a national lab instead of the Colorado substation where it was supposed to be deployed. That move -- and a May executive order from Trump authorizing the blockade of electric grid gear supplied by foreign adversaries of the U.S. in the name of national security -- have already sent shock waves through the power sector.The effect has been to dissuade American utilities from buying Chinese equipment to replace aging components in the nations electrical grid, said Jim Cai, the U.S. representative for Jiangsu Huapeng Transformer Co., the company whose delivery was seized. Although Cai said the firm has supplied parts to private utilities and government-run grid operators in the U.S. for nearly 15 years without security complaints, at least one American utility has since canceled a transformer award to the company, Cai said.Trumps directive is tied to a broader effort to bring more manufacturing to the U.S. from China. This is a part of the administrations efforts to impair Chinas supply chains into the United States, said former White House adviser Mike McKenna.Escalating tensions could jeopardize the U.S. economic recovery as well as Chinas trade commitment to buy 200 billion in American goods and services over the next two years. The countrys purchase of U.S. goods increased last month as the economy continued its recovery from the coronavirus shutdowns, but imports are still far behind the pace needed to meet the terms of the phase one trade deal, according to Bloomberg calculations based on data from Chinas Customs Administration.U.S.-China struggles also may factor into the November presidential election. Former U.S. national security adviser John Bolton alleges in a new book that Trump asked Xi to help him win re-election by buying more farm products -- a claim the White House has dismissed as untrue.I dont expect one single blow to send this relationship in a tailspin, the chambers Brilliant said. Each side will calibrate their reactions in a way that will not tip the scales too far.Take the recent spat over media access. After the U.S. 