Morgan Stanley is taking control of its China business. Will Beijing block it?

Hong Kong(CNN Business) Morgan Stanley is seizing control of its joint venture in China. But the escalating trade war between the United States and China might make things difficult.

The Wall Street bank has signed a contract with Huaxin Securities to buy enough of Morgan Stanley Huaxin Securities, their joint venture, to gain a 51% controlling stake, according to a Friday filing with the Shanghai stock exchange.

Morgan Stanley's Asia unit had controlled 49% of the joint venture, with Huaxin Securities owning the remainder. The Asia unit transferred its 49% stake to its parent company, Morgan Stanley, earlier this week.

To purchase the additional 2% of the joint venture to gain control, Morgan Stanley (MS) is paying Huaxin Securities 376.2 million yuan ($54 million).

Chinese regulators still need to sign off on both the 2% purchase and the 49% transfer, though. That means the souring relationship between the United States and China could quash Morgan Stanley's plans to become the latest foreign bank to take control of its Chinese business.

Morgan Stanley did not immediately respond to a CNN Business request for comment. The China Securities Regulatory Commission also did not immediately respond.

US President Donald Trump exacerbated tensions with China when he announced Thursday that he would add a 10% tariff on $300 billion worth of Chinese-made products starting in September — effectively taxing all goods from China that come into the United States.

China slammed Trump's tariff news Friday.

The move has "seriously violated" the trade truce Trump and Chinese President Xi Jinping reached in June, said Hua Chunying, spokeswoman for China's foreign ministry.

She added that China is "strongly dissatisfied and resolutely opposed to it," and said the country would take countermeasures to "resolutely defend the core interests of the country and the fundamental interests of the people."

Morgan Stanley's move this week is in line with what other banks have done to expand in China. JP Morgan Chase (JPM), Switzerland's UBS (UBS) and Japan's Nomura (NMR) have already received regulatory approval for their plans to control their Chinese businesses.

Credit Suisse, meanwhile, is waiting for approval to take control over its joint venture in the country.

Foreign banks have been investing in China because of relatively new rules that make it easier to do business. Beijing announced in late 2017 that it would allow foreign investors to own 51% of securities firms, investment managers and life insurance providers, and would eventually remove limits entirely.

But the ongoing trade war shows that tensions between China and the western world aren't going away.