Governments are ramping up protectionism, intervening in corporate takeover deals under the ever-expanding umbrella of national security, top lawyers Freshfields have warned.

Donald Trump has faced sharp criticism for threatening to tear up the system of global trade, but plenty of other countries are already practicing their own forms of protectionism when it comes to investment.

All of the G7 nations and most of the G20 countries have either strengthened measures against foreign investors in recent years or are considering doing so.

“Most people’s regimes are focused in on national security, the breadth of that concept is increasing,” said Freshfields partner Deirdre Trapp.

“The Ant Financial-Moneygram deal was blocked in the US before Christmas – it is quite hard to imagine how money transfer is a national security issue per se. But what is clear is that there is a Chinese company involved.”

It is about “economic power and influence, and I also think a little bit about reciprocity,” she said, as barriers to investment in areas such as infrastructure in one country cause other nations to replicate those restrictions in the other direction.

Part of this can be seen in the data for 2017.

Chinese direct investment into the US fell by 35pc on the year to $30bn (£22bn), according to figures from Baker McKenzie.

That is due to Chinese and US restrictions.

“The main reason for the general fall in investment across the globe was the guidelines introduced by the Chinese government imposing additional restrictions on outbound investment to address balance of payment concerns and mitigate perceived risks for China's financial system arising from rapid overseas investment,” Baker McKenzie said.

“In addition to tougher controls in China itself, growing regulatory scrutiny in many host countries also hit FDI activity, with the US Committee on Foreign Investment particularly active, impacting at least seven major deals.”

However, the UK is still attracting more money with $20.3bn of Chinese foreign direct investment, more than double its 2016 total.