U.S. stock futures fell sharply Wednesday evening and markets in Asia tumbled following reports that a senior official of Chinese smartphone maker Huawei was arrested in Canada and is facing possible extradition to the U.S. for violating sanctions against trading with Iran.

Dow futures were down 1.2%, Nasdaq futures were off 1.3%, and S&P futures were 1.1% lower after 9 p.m. Eastern. In Tokyo the Nikkei 225 index fell 1.7% while in Hong Kong the Hang Seng dropped 2.2%. The Shanghai Composite Index fell nearly 1%. 

Meng Wanzhou, the CFO of the company, was taken into custody in Vancouver on Dec. 1 and faces a bail hearing on Friday, according to published reports.

The arrest comes at a sensitive time for U.S. China relations. Over the weekend, President Trump agreed to suspend increases in tariffs on Chinese goods for 90 days, after a meeting with Chinese leader Xi at the G-20 summit in Buenos Aires.

But while the stock market cheered the news with big gains Monday, shares fell sharply on Tuesday as doubts emerged about what had actually been agreed to at the meeting. Markets were closed Wednesday to honor the late former president George H.W. Bush.

Wanzhou's arrest could further raise tensions between the U.S. and China.

It also has implications for U.S. companies that supply parts to the company. Those include Flex (FLEX) - Get Report , Broadcom (AVGO) - Get Report , Western Digital (WDC) - Get Report and Qualcomm (QCOM) - Get Report , according to Bloomberg.