US Secretary of State Antony Blinken has postponed his trip to China after a Chinese spy balloon flew across the US.
A senior State Department official said conditions were not right at this time for what would have been the first high level US-China meeting there in years.
A Chinese apology was noted, the official said, but described the balloon as a clear violation of sovereignty and international law.
The incident comes amid fraying tensions between the US and China
America's top diplomat was set to visit Beijing on 5 February to hold talks on a wide range of issues, including security, Taiwan and Covid-19.
But there was consternation on Thursday when US defence officials announced they were tracking a high-altitude surveillance balloon over the United States.
High-altitude spying marks new low for US-China ties
The incident starkly highlighted the roiling tensions that the visit sought to address, with China's expression of regret not enough to dispel the administration's need to respond to the spying suspicions.
A senior state department official said that the balloon would have "narrowed the agenda" of any meetings with Chinese officials "in a way that would have been unhelpful and unconstructive".
While the balloon was, the Pentagon said, "travelling at an altitude well above commercial air traffic" and did "not present a military or physical threat to people on the ground", its presence sparked outrage.
Former US President Donald Trump was among those calling for the US military to shoot it down.
On Friday, China finally acknowledged the balloon was its property, saying that it was a civilian airship used for meteorological research, which deviated from its route because of bad weather.
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A statement from China's Foreign Ministry said that it regretted the incident and would work with the US to resolve the issue.
However, the state department official said that while the US acknowledged China's claim about the balloon's purpose, it stood by the assessment that it was being used for surveillance.
Another trip by Mr Blinken to China would be planned "at the earliest opportunity" another senior state department official said, adding that Washington planned to maintain "open lines of communication" about the incident.