Fosun is pulling back from the U.S. biotech sector in response to the escalating trade war with China. The Chinese conglomerate has struck deals with Kite Pharma, Revance Therapeutics and other U.S. biotechs in the past but now plans to limit its activities in the country.

Talking to Bloomberg, Kevin Xie, who oversees Fosun’s healthcare investments outside of China, set out how the standoff between government leaders at the two global powers has affected his work.

“Trade friction has impacted our investments in the U.S., but not to the extent of stopping all deals,” Xie said. “Companies in the U.S. still welcome investments and are willing to work with us, so we are making some changes in the wiggle room allowed under the law.”

Fosun’s difficulties stem from a shift in the position of the Committee on Foreign Investment in the United States (CFIUS). Under President Donald Trump, CFIUS has intensified its assessments of the national security implications of the takeovers of domestic assets and extended its reach beyond M&A.

Notably, in August CFIUS gained the power to screen certain foreign venture capital transactions and to restrict the licensing and transfer of technologies. The full impact of the new powers will only become clear as key details about its implementation, such as the technologies the restrictions apply to, are worked out. But the initial impact has been big enough to persuade Fosun to shift focus from the U.S.

If other Chinese investors follow Fosun’s lead, the U.S. biotech sector will lose access to a significant source of investment. Last year, Chinese investors struck U.S. healthcare deals worth $2.8 billion, up from around $700 million the previous year.

The surge in the outbound activity of Chinese investors and biopharma companies has provided U.S. with money and overseas partners. And U.S. VCs have secured money from Fosun and other Chinese players, too.