The CFO of Huawei was arrested, and it could spark the US-China trade war.

Meng Wanzhou, Chief Financial Officer of Chinese company Huawei, was arrested in Canada this week.

According to Business Insider, Meng, who is also the daughter of Huawei’s founder, Ren Zhengfei, was reportedly arrested on suspicion of violating U.S. trade law by exporting products from the U.S. to sanctioned countries like Iran. The arrest could have bigger implications for the second largest smartphone manufacturer in the world, only behind Samsung, whose practices have been the subject of a years-long federal investigation, as well as for the escalating trade war between U.S. and China.

The case has also raised fears among investors and analysts that the trade truce between President Donald Trump and Chinese President Xi Jinping made at theG20 summit may already be dissipating.

Zhiwei Zhang, Deutsche Bank’s chief China economist, said Thursday: “We believe this is a clear signal that the trade war is escalating to a new level (…) We think the probability of US and China reaching a trade deal by March 1 has dropped to 30% from 40%.”

China has already ordered Canada to “immediately release” the Huawei executive. Stock markets across Asia and Europe took a nosedive following the news, and US markets opened in a bad way.

Jeff Sessions responded

While still serving as US attorney general, Jeff Sessions made the administration’s position clear in a press conference announcing the China Initiative.

“As the cases I’ve discussed have shown, Chinese economic espionage against the United States has been increasing — and it has been increasing rapidly. We are here today to say: enough is enough. We’re not going to take it anymore.”