With the deepening rift between the world’s two biggest economies now affecting nearly every aspect of bilateral relations, this week’s consulate crisis could spell the end for their engagement policy.

US Secretary of State Mike Pompeo said as much on Thursday, saying nearly 50 years of economic and political engagement had failed to “produce a future with bright promise of comity and cooperation”.

Instead, US-China relations entered their most unpredictable period since the 1970s, after Washington on Wednesday ordered the closure of China’s consulate in Houston within 72 hours. It said the move was made to “protect Americans’ intellectual property and private information”. Beijing retaliated, saying on Friday that it had told the US to close its consulate in Chengdu.

Observers say the downward spiral is likely to continue, and they are generally pessimistic about where bilateral ties are headed after the latest escalation of tensions.

Sourabh Gupta, a senior fellow at the Institute for China-America Studies in Washington, said it was possible that China’s Houston consulate may have been involved in Chinese state-linked cyberespionage for commercial gain and influence operations in the US.

“But I did not expect the rupture to extend beyond the trade, investment, intellectual property, and science and technology exchanges arena as such, and begin to swallow the bilateral relationship as a whole,” he said.

While it is not the first time the Donald Trump administration has shut down a foreign diplomatic mission, the consulate row between Beijing and Washington is different, and unprecedented in the 41 years of US-China relations.

According to Pang Zhongying, an international affairs analyst from the Ocean University of China, the closure of Russia’s consulate in San Francisco in September 2017 was the culmination of a long and bitter diplomatic wrangle over Moscow’s alleged meddling in the 2016 presidential elections.

It was preceded by sweeping US sanctions and Moscow reducing the number of US diplomats in Russia by over 700.

Observers also questioned why the US escalated this current situation by targeting the Chinese consulate instead of taking other action like expelling diplomats, which arguably could have served a similar purpose but with less serious damage.

“The Trump administration likes to characterise its approach on China as not being premised on determining a particular end state for its relationship with China, but that it is just protecting vital US national interests,” Gupta said. “This characterisation of its motives and actions is patently dishonest.”

Steve Tsang, director of the SOAS China Institute at the University of London, also cast doubt over Washington’s official explanation for the closure.

“In fact I think closing diplomatic missions is in general terms a bad idea. Diplomacy is most needed when relations between two countries are bad and getting worse,” he said.

Tsang said the dramatic escalation of tensions was likely a move intended to save Trump’s re-election bid amid widespread criticism of his administration’s handling of the coronavirus pandemic.

“But acts like this will bake into the system an approach that will be costly to reverse by a subsequent administration, particularly as the other party responds in an equally thoughtlessly hard way,” he said.

“Whoever wins the US presidential election, there will not be a return to pre-Trump days in US-China relations. That ship has long sailed.”

Gal Luft, co-director of the Institute for the Analysis of Global Security in Washington, agreed, saying the US-China relationship had deteriorated to the point where “even a Biden presidency is not likely to repair it”.

He said there could be more aggressive US policies to come, as the Trump administration tried to build on mounting anti-China public sentiment caused by the pandemic.

“The Trump administration is behaving like a wounded animal, lashing out at China in all directions and using all means,” he said.

Luft also warned of the heightened risk of a military conflict or even war.

“What we are witnessing today is a process of manufacturing consent for future war with China, using the same tactics used prior to the Vietnam war and the 2003 war with Iraq – demonising an entire society, silencing dissent, hyping of the threat and manipulating intelligence,” he said. “We all know how it ended.”

Analysts also believed Washington’s willingness to provoke Beijing would make its efforts to build an anti-China coalition more challenging, mostly because countries were reluctant to become pawns in a superpower conflict.

The rapidly worsening tensions with the US would also have lasting impact on China’s domestic situation, according to Chen Daoyin, an independent political scholar.

But Beijing is not expected to take a step back from its assertive stance – it is more likely to tighten Communist Party control over the country, and ramp up nationalist propaganda and censorship to quell possible discontent and dissent.

“External pressure, especially from the US, will undoubtedly bring changes to China’s domestic politics. However, the political situation will remain stable at least for three to five years,” Chen said.

“As long as unemployment is not too severe, ordinary people will continue to trust the party. The risk of social unrest will be controllable.”