President Donald Trump on Wednesday declared a national emergency over threats against American technology, the White House said.
The move, done via executive order, authorized the Commerce Secretary Wilbur Ross, in consultation with other top officials, to block transactions that involve information or communications technology that "poses an unacceptable risk to the national security of the United States."
Following the order, the U.S. Department of Commerce announced the addition of Huawei Technologies and its affiliates to the Bureau of Industry and Security (BIS) Entity List, making it more difficult for the Chinese telecom giant to conduct business with U.S. companies.
The addition means that U.S. companies cannot sell or transfer technology to Huawei without a license issued by the BIS. That could make it harder for Huawei to do business, as it depends on some U.S. suppliers for parts.
President Donald Trump backed the decision, which will "prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests," Commerce Secretary Wilbur Ross said in a statement.
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."
The announcement has been under discussion for a year. It comes as the U.S. and China remain locked in a trade dispute and could escalate tensions between the world's two largest economies.
The order had been opposed by small rural carriers, who continued to rely on Huawei equipment even after it was largely dropped by the larger telecommunications companies.
In a statement, White House press secretary Sarah Huckabee Sanders wrote that the administration will "protect America from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services in the United States."
The Trump administration has pushed allies around the world not to adopt the company's next generation 5G network technology, which American officials have warned could be used for spying by the Chinese. Those efforts have had mixed results in Europe, where several countries declined to stop doing business with the company.
Huawei has forcefully denied allegations that it is not independent from the Chinese government.
In recent months, the U.S. has taken a number of steps against the firm.
In January, the Department of Justice announced a slew of charges against two units of the company, including for stealing trade secrets from T-Mobile USA. And both Huawei and ZTE, another Chinese technology firm, were barred from most U.S. government contract work by the 2019 Defense Authorization Act.
In December, Canadian authorities arrested Huawei CFO Meng Wanzhou to serve an extradition request from the U.S. government, which has alleged that the company defrauded several banks by concealing payments from Iran in violation of sanctions against that country.
Earlier Wednesday, David Wang, an executive at the company, told The Wall Street Journal that such an order would be misguided.
—Reuters contributed to this report