China restricts local companies from investing in US amid tariff war

China has taken steps to restrict local companies from investing in the United States, a move that could provide Beijing with greater leverage in potential trade negotiations with President Donald Trump's administration, Bloomberg reports, citing sources familiar with the matter.

China's action is seen as retaliation against US tariffs imposed by Trump's administration.

In February, the US introduced

This followed China's earlier response, which

More recently, the imports from China and other countries.

For months, tensions between the US and China have remained high.

In a new development, several branches of China’s top economic planning agency, the National Development and Reform Commission, NDRC, have recently been instructed to suspend registration and approval processes for firms seeking to invest in the US, according to sources who requested anonymity due to the sensitivity of the issue.

While China has previously imposed restrictions on certain overseas investments due to national security concerns and capital outflows, the latest measures highlight escalating tensions between the world’s two largest economies as Trump intensifies tariff measures.

According to the latest available data, China’s outbound investments into the US totalled $6.9 billion in 2023.

Sources indicate there is no sign that existing commitments by Chinese companies in the US, or China’s holdings of financial products such as US Treasuries, will be affected. However, it remains unclear what prompted NDRC to halt application processing or how long the suspension will last.

Neither NDRC nor the Ministry of Commerce, which oversee foreign investment approvals, responded to requests for comment at the time of filing this report.

Following the Bloomberg report, US equity futures dropped to session lows, while European stocks extended their decline.