President Donald Trump has declared a national emergency to protect US computer networks from “foreign adversaries”.
He signed an executive order which effectively bars US companies from using foreign telecoms believed to pose national security risks.
According to a White House statement, Mr Trump’s order aims to “protect America from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services”.
It gives the secretary of commerce the power to “prohibit transactions posing an unacceptable risk to the national security”, the statement adds.
The order does not name any company, but is believed to target Huawei.
The Chinese tech giant said restricting its business in the US would only hurt American consumers and companies.
Several countries, led by the US, have raised concerns in recent months that Huawei products could be used by China for surveillance, allegations the company has vehemently denied.
The US had already restricted federal agencies from using Huawei products and has encouraged allies to shun them, while Australia and New Zealand have both blocked the use of Huawei gear in 5G networks.
In a statement to CNBC on Thursday, Huawei said: “Restricting Huawei from doing business in the US will not make the US more secure or stronger; instead, this will only serve to limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment, and eventually harming the interests of US companies and consumers.”
The Chinese tech company also said: “We are ready and willing to engage with the US government and come up with effective measures to ensure product security.”