US investors ‘wary’ of China deals amid trade war threat

US business leaders have largely sidelined deal making in China amid rising trade tensions, according to US investment firm executives. 

They will be watching closely to see if US Treasury Secretary Steven Mnuchin’s visit to China this week can ease fears.

Deal makers gathered at the Milken Institute Global Conference in Beverly Hills, California, on Monday spoke of a dwindling willingness to do business in China as tariffs on goods worth billions of dollars hang in the balance of trade discussions between the world’s two largest economies. Mnuchin, along with top economic and trade advisers Larry Kudlow, Robert Lighthizer and Peter Navarro, are heading to China this week in an effort to hammer out some form of an agreement.

“We’re seeing pause on deal flow in and out of China,” EY Global vice-chair of transaction advisory Steve Krouskos said. “If Mnuchin’s visit is a success, there could be a backlog of deals that could be unleashed.”

Here’s what top deal makers are saying about US-China tensions:

“It creates imponderables that are very, very difficult to price,” Bain Capital managing partner Jonathan Lavine said. “There will be a lot of wait and see. When you think about investing in a region, you’re often thinking about local things that are going to impact how you approach the region and now you have the added element of how our government is going to impact our ability to invest in a particular region.” “We’re really hopeful a lot gets accomplished” during Mnuchin’s visit.