Heightening tension between China and Canada, Canadian Public Safety Minister Ralph Goodale confirmed that a former Canadian diplomat had been detained in Beijing.
The detention came after China warned Canada of consequences for Meng's arrest.
Michael Kovrig, who previously worked as a diplomat in Beijing, Hong Kong and the United Nations, was taken into custody Monday night during one of his regular visits to Beijing, according to a spokesman for International Crisis Group, where Kovrig now works as an advisor based in Hong Kong.
Canada had been bracing for retaliation for Meng' arrest.
The Canadian province of British Columbia canceled a trade mission to China amid fears China could detain Canadians to put pressure on Ottawa over Meng's detention.
In Vancouver, meanwhile, Meng appeared in court for a third day Tuesday as she sought release on bail.
Meng's lawyer, David Martin, said his team had worked through the night to satisfy concerns about the Chinese executive's potential release.
Meng has denied the US allegations through her lawyer in court, promising to fight them if she is extradited to face charges in the US.
Earlier in the day, China vowed to "spare no effort" to protect against "any bullying that infringes the legitimate rights and interests of Chinese citizens."
Washington accuses Huawei of using a Hong Kong shell company to sell equipment to Iran in violation of US sanctions. It says Meng and Huawei misled banks about the company's business dealings in Iran.
Huawei, the biggest global supplier of network gear for phone and internet companies, is the target of U.S. security concerns. Washington has pressured other countries to limit use of its technology, warning they could be opening themselves up to surveillance and theft of information.
The US and China have tried to keep Meng's case separate from their wider trade dispute and have suggested talks to resolve their differences may resume.