China Halts New Investments in US Private Equity Amid Deepening Trade War

|By Babatunji Wusu-

-Beijing Pulls Back Amid Escalating US-China Trade Tensions
–Chinese State-Backed Funds Freeze New Commitments to American Private Equity

Chinese state-backed funds have suspended new investments in US private equity firms, signalling a major shift in Beijing’s response to the ongoing trade war with the United States.

According to a report by the Financial Times on Monday, the move reflects rising pressure from the Chinese government, following fresh tariff hikes from Washington under President Donald Trump’s administration.

The report revealed that several major Chinese investors have stopped committing capital to US-managed funds and, in some cases, are actively seeking to withdraw from American deals — even those led by non-US private equity firms.

This decision marks a significant escalation in the already tense standoff between the world’s two largest economies, as each side imposes increasingly punitive trade measures.

In the past three weeks alone, the US has slapped tariffs of up to 145% on Chinese goods, intensifying pressure on Chinese exports. In response, China introduced retaliatory levies of up to 125%, and earlier this month, the Chinese government banned local companies from investing in the US, further tightening the investment pipeline.

Analysts warn that the freeze on cross-border investment could widen the rift between the two countries and have long-term implications for global capital markets.

The developments signal that the economic decoupling between the US and China is accelerating, with private equity investment now the latest battleground in a spiraling trade and geopolitical conflict.