The rapidly deteriorating trade and investment relationship between Washington and Beijing is sending a further chill through Chinese dealmakers who have already seen the number of Chinese acquisitions of American assets take a big hit.
So far this year, Chinese companies have spent just $1.6 billion on U.S. assets, down almost 80 percent from the year-earlier period, according to Thomson Reuters data. By contrast the amount China has spent on European assets has risen 39 percent from last year to $45.1 billion.
"We are now focusing on Europe-bound deals and having U.S. deals on hold. The trade war between China and U.S., if not short-term, will be a mid-term thing and will take some time to conclude," said Lin Feng, founder and CEO of Chinese investment and advisory firm DealGlobe.
"Opportunities in the U.S. will be more small investments, or joint ventures in China. It will definitely hurt significant minority stake acquisitions, but on the other hand it may help targets in Europe and Israel," he added.
In 2016, which stands as the record for Chinese cross-border dealmaking, China acquired U.S assets worth $62.6 billion and spent $88.4 billion on European assets.
Since then, China's imposition of capital controls and in particular a regulatory crackdown on some of its most acquisitive companies, such as HNA Group, Dalian Wanda Group Co and Anbang Insurance Group, have badly dented Chinese investment flows heading for American shores.
The rejection by Washington of some major deals on national security grounds have only acted as a further deterrent to bankers and the Chinese companies they advise.
And this week, Washington has been signaling there will be tougher restrictions on Chinese investment, especially in sensitive areas of the economy, such as technology.
On Tuesday, the U.S. House of Representatives overwhelmingly passed a bill to tighten foreign investment rules, spurred by bipartisan concerns about Chinese attempts to acquire sophisticated U.S. technology.
Then on Friday, the Trump administration is due to issue to proposed new restrictions on foreign investment in U.S. technology companies.
And there is also the escalating tit-fot-tat trade dispute, in which the United States has threatened to impose duties on up to $450 billion of Chinese imports, with the first $34 billion portion set to go into effect next month.
Since U.S. President Donald Trump took office early last year, dealmakers have steadily become accustomed to a more hostile U.S environment.
Headline deals blocked by Washington in recent months included, notably, the $1.2 billion acquisition of Moneygram International by China's Ant Financial in January. Delays in gaining approval led to the abandonment of a plan for HNA to buy a $200 million stake in Skybridge Capital LLC, a hedge fund founded by Trump's former aide Anthony Scaramucci.
Other scrapped deals have ranged from a $25 million bid for a stake in the Chicago Stock Exchange, which was blocked by the U.S. Securities and Exchange Commission, to a $16.5 million offer for a U.S. pig breeder
The door is not entirely closed, though. This month the U.S. approved the $2.7 billion takeover of U.S. insurer Genworth Financial by China Oceanwide Holdings Group - a deal first struck in October 2016.
And dealmakers remain hopeful that any easing in the current tensions could boost China-U.S. deal volumes once more.
"This may not be the best timing. When the trade war is over, people will come back," said Samson Lo, head of Asia M&A at UBS. "Investors will continue to seek to identify attractive assets in the U.S."
A senior executive with a Hong Kong-based investment firm confirmed he was still looking at U.S. deals. The new U.S. measures "will definitely impact future deals and curb China's enthusiasm," he said. "but we are still engaged in conversations."
Another executive at the private equity arm of a Chinese state bank said the firm is also still actively studying U.S. deals.
"We are trying to see how we can participate," she said. "Maybe we will just go for a very small stake."
Still, investments in technology have become a whole front in their own right in what some bankers consider a "cold war" for cross-border deals in the sector.
Reuters reported this week that China has begun downplaying Made in China 2025 - a key policy designed, among other things, to back overseas investment in key sectors, but which had provoked alarm in the West.
"Many of our tech clients understand the prospects. They are all cautious and will not pursue big investments at this point in time," said one senior Hong Kong-based investment banker.
Chinese investors have announced just five U.S. technology company acquisitions so far this year, totalling just $278 million, Thomson Reuters data shows - the lowest figure in five years.
Mind you, Joseph Gallagher, head of Asia Pacific M&A at Credit Suisse, noted that issues around tech deals were not only a U.S.-China issue as European governments are also wary of China getting hold of key technology.
"Europe is becoming more difficult for Chinese acquisitions as well," he said. " If the tech cold war went away, there would be significant tech M&A activity, but that's not likely to happen."
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