The US is ramping up a conflict with China, putting their economies and their diplomatic relationship at risk.
It has moved to restrict Huawei’s ability to trade with US firms, shortly after reigniting the trade war with tariff hikes.
The latest blows to the Chinese telecoms giant mark a grave escalation in the US-China power struggle.
As the trade war broadens into a “technology cold war”, the prospect of a deal looks increasingly distant.
“The US action against Huawei is a watershed moment and a very significant escalation of tensions,” says Michael Hirson, Asia director at the Eurasia Group.
“A trade deal is not doomed but looks very unlikely, especially in the near term.”
The crackdown on Huawei has become a central part of relations between Washington and Beijing, which has primarily played out as a trade war over the past year.
While the US has justified its actions against Huawei based on the alleged risk it poses to national security, US President Donald Trump has also linked it to the trade row.
Only recently, Mr Trump said Huawei could be part of a trade deal between the world’s two largest economies.
Such comments risk reinforcing a view that the action against Huawei is about more than just security risks.
Some see it as an attempt by the US to contain a powerful Chinese firm, and by extension China’s growing importance in the world.
“The prospect of a US action hobbling one of China’s most prominent tech companies, and key to its global ambitions in 5G, is already evoking a surge of nationalist sentiment in China,” says Mr Hirson.