Things between China and the US are getting nastier. What happens now to the trade talks?

The currency spat between the United States and China won’t be helpful when it comes to resolving the two countries’ ongoing trade issues.

The US move to designate China a currency manipulator “is another escalation in a deteriorating bilateral relationship that looks set to get even worse,” Julian Evans-Pritchard, a senior China economist at Capital Economics, wrote on Tuesday.

While the designation is “mostly symbolic” and has “limited practical implications,” the decision is still expected to worsen tensions, he added.

American and Chinese negotiators met for the latest round of trade talks in Shanghai last week. Afterward, both sides said that the meetings were “constructive,” but offered few signs of real progress.

Tai Hui, JPMorgan’s chief market strategist for asset management in Asia, also noted Tuesday that the US move to label China as a currency manipulator marked “another major setback to the possibility of a trade agreement.”

Washington is set to host the next round of talks in early September, but expectations for a breakthrough remain low.