Canada has complained to the US that its citizens in China are being punished because Washington wanted to arrest a Chinese business executive.
The United States will proceed with the formal extradition from Canada of Huawei executive Meng Wanzhou, Canada's ambassador to the United States says.
David MacNaughton, in an interview with a Canadian newspaper, said the United States has told Canada it will request Meng's extradition, but he did not say when the request will be made.
The deadline for filing is January 30, 60 days after Meng was arrested on December 1 in Vancouver.
Meng, the daughter of Huawei founder Ren Zhengfei, was arrested at the request of the United States over alleged violations of US sanctions on Iran.
She was released on bail last month and is due in court in Vancouver on February 6.
Relations between China and Canada turned frosty after the arrest, with China detaining two Canadian citizens and sentencing to death a Canadian man previously found guilty of drug smuggling.
China's Foreign Ministry on Tuesday reiterated calls for Meng's immediate release and said her case clearly was "not a regular judicial case".
Anyone with fair judgment would determine that Canada made a "serious mistake" in this matter, ministry spokeswoman Hua Chunying said.
"Canada and the United States arbitrarily abused their bilateral extradition treaty to seriously infringe upon a Chinese citizen's security and legal rights," Hua said.
China "strongly urges" the United States to correct its "mistake", cancel the arrest order for Meng, and not make a formal extradition request, she added.
Asked if China would retaliate against the United States if Meng is extradited, Hua said, "China will, of course, respond to US actions."
In Monday's interview, MacNaughton said he had complained to the United States that Canada was suffering from Chinese revenge for an arrest made at the US's request.
"We don't like that it is our citizens who are being punished," the Toronto Globe and Mail quoted MacNaughton as saying.
"(The Americans) are the ones seeking to have the full force of American law brought against (Meng) and yet we are the ones who are paying the price. Our citizens are."