China is likely to retaliate to any trade barriers imposed by the Trump administration by switching supply of US products, including meat, coal and agricultural items, to other sources including Australia.

"Of any Western nation in the world, we may be the best placed," former Austrade chief economist Tim Harcourt, a fellow at the UNSW Australia business school, said.

Comments by US President Donald Trump's spokesman Sean Spicer that the US was considering a 20 per cent tariff on imports from the US' third largest trading partner Mexico have sharpened focus on Mr Trump's election pledge to hit imports from its second-largest trading partner, China, with high tariffs.

Beijing has prepared a plan of retaliation to any US move, and it could include reducing imports of American aircraft from Boeing and agricultural products, or targeting US companies with tax investigations and anti-competition probes, according to The New York Times and Bloomberg reports citing unnamed Chinese officials.

Deputy director of the Australia-China Relations Institute at the University of Technology Sydney, James Laurenceson, said

China was likely to retaliate through strategic government buying decisions, choosing the European aircraft supplier Airbus over Boeing, for example. But the US was also likely to "get the reputation as an unreliable supplier" prompting Chinese companies to buy elsewhere, including Australia.

"Its not just state-owned airline companies making buying decisions," he said. "You can be sure Chinese consumers would not be happy with the US and may start to switch to Australian beef not US beef."

Data presented to the US Congress' US-China Economic and Security Review Commission on Friday showed direct investment by Chinese companies in the US tripled to $US46 billion in 2016 and was dominated by private companies such as computer maker Lenovo, and focused on real estate, IT, hotels and entertainment.

The two biggest Chinese investors, HNA and Wanda, have recently also made forays into Australia.

HNA, which owns Hilton Hotels worldwide, took a 13 per cent stake in Virgin Australia last year. Wanda owns cinema chain Hoyts and property developments on the Gold Coast and at Circular Quay.

Mr Harcourt predicted Mr Trump would stick to Twitter to cajole US companies to move their supply chains back to the United States instead of starting a trade war with China, or blocking off Chinese investment.

"It is mainly rhetoric," he said. "Trade policy comes from Congress, rhetoric comes from the White House."

The threat of China reducing its holdings of American bonds – making it harder for Mr Trump to fund his plans to rebuild American infrastructure – was raised as a possibility by prominent Chinese foreign policy analyst Yan Xuetong, dean of the Institute of International Relations at Tsinghua University, this week.

China is the second largest holder of US treasury bonds, behind Japan.

China's $US3 trillion foreign currency reserve fell in the past six months as its central bank sought to prop up the yuan, but remained "enormous", Mr Laurenceson said.

"It is a scare tactic," he said. "They would be shooting themselves in the foot. They buy US government bonds because it is stable."

Mr Harcourt said: "They could do it, but it would hurt their own financial position doing that... The great hope of globalisation was that countries would be so bound together they would never start a trade war."