In this photo illustration, the Huawei logo and Chinese flag is seen displayed on an Android mobile phone.

5G refers to next-generation mobile networks that promise super-fast data speeds and the ability to underpin critical infrastructure, which is why it is viewed as so high stakes. The U.S. is concerned that Huawei has close links to the Chinese Communist Party and point to laws that appear to compel companies to comply with any requests for data from Beijing. Huawei has said it would never give customer data to the government .

The threat of cutting off intelligence sharing is an argument that the U.S. has used several times , including against the U.K. which recently allowed Huawei to play a limited role in its 5G networks .

On Sunday, Richard Grenell, the U.S. ambassador to Germany, tweeted that President Donald Trump had called him and instructed him to "make clear that any nation who chooses to use an untrustworthy 5G vendor will jeopardize our ability to share intelligence and information at the highest level."

The U.S. has maintained that China's Huawei is a national security risk and that its networking equipment could be used by Beijing for espionage on American citizens. Huawei has repeatedly denied those claims.

China has accused the U.S. of double standards in its criticisms of telecommunications giant Huawei, bringing up a past allegation that Washington tapped the phone of German Chancellor Angela Merkel .

In response to Grenell's tweet, Hua Chunying, the spokesperson for China's Ministry of Foreign Affairs, accused the U.S. of hypocrisy.

"Who he (Grenell) is threatening? Who's the real threat? Remember, Snowden said US spied on Chancellor Merkel's phone!," she tweeted.

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In 2013, former U.S. National Security Agency (NSA) contractor Edward Snowden released numerous documents relating to the organization's activities. German publication Der Spiegel reported at the time that the documents revealed the NSA had bugged European Union offices in Washington and infiltrated the EU's computer networks.

In October 2013, Der Spiegel published a piece in which it claimed that the U.S. tapped Merkel's phone. The allegations led to an investigation by German federal prosecutors which was eventually dropped because of a lack of evidence that would stand up in court.

At the time, the White House insisted in a statement that it "is not monitoring and will not monitor" Merkel's phone.

The latest salvo between the U.S. and China comes after more than a year of pressure on Huawei. The Chinese giant was put on a U.S. blacklist last year, restricting its access to American technology. Last week, the Department of Justice expanded its indictment against Huawei, accusing the company of racketeering and plotting to steal trade secrets from American companies. Huawei denies the allegations.

Germany is the next battleground between the U.S. and Huawei after the U.K. decided to allow the Chinese firm a partial role in its 5G networks. Germany has yet to decide whether to exclude Huawei.

Merkel's Christian Democratic Union party backed a strategy paper that stops short of a full ban on Huawei's involvement in Germany's next-generation mobile infrastructure. Bloomberg reported that a vote will take place this week on this paper in a motion that dubs 5G as "critical infrastructure" that must have the highest security standards. The draft motion does not single out China or Huawei, Bloomberg said.

The decision over Huawei could spark a row between Germany, China and the U.S. If there is not an outright ban on Huawei, the U.S. will feel slighted. But if Huawei is banned, China is no doubt going to be angered. Germany will have to carefully balance its relationship with the U.S. and China, two of the country's top trading partners.

Over the weekend, U.S. lawmakers continued to ramp up pressure on Huawei. U.S. House Speaker Nancy Pelosi said Chinese domination of 5G would be akin to "choosing autocracy over democracy on the information highway."

Meanwhile, Secretary of State Mike Pompeo described Huawei and Chinese state-backed tech companies as "Trojan horses for Chinese intelligence."