China has taken measures to restrict local companies from investing in the United States, potentially giving Beijing greater leverage in trade negotiations with the Trump administration.
This move is seen as retaliation against US tariffs imposed by Trump’s administration.
The US introduced an additional 10% tariff on Chinese goods in February, following China’s earlier response of imposing a 15% tariff on US coal and liquefied natural gas.
More recently, the US imposed a 25% tariff on automobile imports from China and other countries.
Tensions between the US and China have remained high for months.
In a new development, Several branches of China’s top economic planning agency, the National Development and Reform Commission (NDRC), have been instructed to suspend registration and approval processes for firms seeking to invest in the US.
This move highlights escalating tensions between the world’s two largest economies as Trump intensifies tariff measures.
China’s outbound investments into the US totaled $6.9 billion in 2023.
Sources indicate that existing commitments by Chinese companies in the US and China’s holdings of financial products, such as US Treasuries, will not be affected.
However, it remains unclear what prompted NDRC to halt application processing or how long the suspension will last.