The arrest of Huawei CFO Meng Wanzhou on Wednesday reminds that the Chinese tech giant faces allegations of using its devices to spy on Americans.
In April, the Pentagon stopped selling mobile phones and modems made by Huawei and ZTE at stores on military bases around the world due to potential security risks.
"These devices may pose an unacceptable risk to the department's personnel and mission," wrote Pentagon spokesman Lt. Col. Dave Eastburn. The Pentagon reaffirmed Thursday that its policy on banning the devices still stands.
In February, the Director of National Intelligence alongside the heads of the FBI, CIA, NSA, Defense Intelligence Agency, and National Geospatial Intelligence Agency testified before lawmakers on potential security risks posed by Chinese telecommunication companies.
"We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks," FBI Director Chris Wray told the U.S. Senate Intelligence Committee.
"It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage," Wray added.
Huawei and ZTE have previously denied allegations that their products are used to spy on Americans.
Meng, 46, was arrested by Canadian authorities in Vancouver for reported violations of U.S. sanctions on Iran. The arrest renews fears of trade tensions between the U.S. and China and looms over a 90-day truce brokered by Presidents Donald Trump and Xi Jinping last week.
What's more, the arrest and any potential sanctions on the world's second largest smartphone manufacturer could shake the global tech supply chain. Meanwhile, global chip stocks in Europe and Asia tumbled on Thursday.