China Restricts Local Firms From Investing In US As Trump’s Reciprocal Tariffs D-Day Arrives

Hours before President Trump is set to announce reciprocal tariffs—threatening to unleash a global trade war on what he has called ”Liberation Day”—the Chinese Communist Party is already preparing a financial counteroffensive. 

Bloomberg cites people familiar with the matter who say Beijing plans to restrict local companies from investing in the United States. This move would give the world’s second-largest economy more economic leverage in trade negotiations as Sino-U.S. tensions deteriorate.

Here’s more from the report:

Several branches of China’s top economic planning agency, the National Development and Reform Commission, have been instructed in recent weeks to hold off on registration and approval for firms that are looking to invest in the U.S., the people said, asking not to be identified discussing sensitive issues.

. . .

There’s no sign that existing commitments by Chinese companies in the U.S. and elsewhere, or China’s purchases and holdings of financial products including U.S. Treasuries, would be affected, the people said. It’s unclear what prompted the NDRC to halt the processing of applications or how long this suspension might last.

The economic decoupling between the U.S. and China continues to accelerate, driven by trade wars and President Trump, who believes, as he said over the weekend to NBC: “The world has been ripping off the United States for the last 40 years and more … and all we’re doing is being fair.”

Trump’s planned reciprocal tariffs and China’s reported move to restrict outbound investment from local companies into the U.S. signals a new phase of superpower decoupling. This decoupling has been happening across multiple areas:

• Technology 

• Capital Flows

• Trade  

Goldman analyst Chloe Garber commented on the BBG report, noting:

BBG reported this morning that China has taken steps to restrict local companies from investing in the U.S. ahead of new tariffs, people familiar said. Several branches of China’s top economic planning agency have been instructed in recent weeks to hold off on registration and approval for such firms. Simply put – there are a lot of unknowns here still and mkts hate the uncertainty.

With just hours to go before Trump’s “Liberation Day” announcement—expected around 4 p.m.—here’s everything you need to know to stay on top of the tariff news cycle (read: here).