The investment freeze follows a renewed round of tariff hikes initiated by U.S. President Donald Trump in April, raising duties on Chinese imports to as high as 145%. Though both sides agreed in June to temporarily lower tariffs to 55%, the move did not extend to lifting capital curbs. Chinese outbound investment into the United States had already declined drastically in recent years—from record highs in 2016 to just $3.2 billion in 2024—as political friction and national security reviews deterred new deals.

Sources say the investment halt affects multiple sectors and was implemented quietly by both national and provincial authorities, underscoring the depth of China’s policy shift amid deteriorating trust with Washington.

No Clear End To Freeze Ahead Of Truce Deadline

Trade officials from both countries remain in discussions, with an August 12 deadline looming to decide on extending the current tariff truce. However, there is no indication that China intends to resume outbound approvals in the short term. The investment halt adds another layer of uncertainty to global financial flows and bilateral business cooperation, even as Beijing continues to push for favorable concessions on tariffs and market access.

The move reflects China’s tightening grip on outbound capital as a lever in broader trade negotiations, signaling a more defensive stance in the escalating U.S.–China economic rivalry.