Nothing's preventing it from escalating to war. The national defense agencies in all countries probably have plans if that happens... I believe and really hope that an actual war won't happen. There's too much to lose, and little to gain.

A technological cold war will likely happen, Huawei and other Chinese companies will just continue R&D and manufacturing on their own. In a way, the US is letting go of whatever control they had left and making it easier for them to form their own alliances in this matter. It will just polarize the world more... again, as always.