Washington: President Donald Trump has barred American companies from using foreign-made telecom equipment posing a national security threat, a move aimed at banning Chinese giant Huawei from US networks amid an escalating trade war between the world's two largest economies.
President Trump signed an executive order on Wednesday which did not directly name any country or company, but officials have previously named Huawei a "threat" and asked allies not to buy equipment for the next-generation 5G networks from the world's largest provider of telecommunications.
Meanwhile, in Beijing, Huawei said "unreasonable restrictions" by the US infringe on its rights after President Donald Trump barred US companies from using foreign telecoms equipment - a move that appeared aimed at the Chinese firm.
"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," the telecom giant said in a statement.
"In addition, unreasonable restrictions will infringe upon Huawei's rights and raise other serious legal issues," the company statement said.
Under the US order that will take effect in the coming days, Huawei will need a US government license to buy American technology.
Soon after the executive order - "Securing the Information and Communications Technology and Services Supply Chain" - was signed, the Bureau of Industry and Security (BIS) of the Department of Commerce announced that it will be adding Huawei Technologies Co. Ltd and its affiliates to its Entity List.
The Department of Commerce alleged that Huawei was engaged in activities that are contrary to US national security or foreign policy interest. As a result, sale or transfer of American technology to a company or person on the Entity List requires a license issued by the BIS, and a license may be denied if the sale or transfer would harm US national security or foreign policy interests.
The listing will be effective when published in the Federal Register.
"This action by the Commerce Department's Bureau of Industry and Security, with the support of the President of the United States, places Huawei, a Chinese-owned company that is the largest telecommunications equipment producer in the world, on the Entity List," Commerce Secretary Wilbur Ross said.
This will prevent American technology from being used by foreign-owned entities in ways that potentially undermine US national security or foreign policy interests, Ross said, adding that it has been done at the direction of the president.
In the order, Trump determined that the unrestricted acquisition or use in the US of information and communications technology or services that are subject to the jurisdiction or direction of foreign adversaries augments the ability of those foreign adversaries to create and exploit vulnerabilities in information and communications technology or services and that can have potentially catastrophic effects, and thereby, constitutes an unusual and extraordinary risk to US national security, foreign policy and economy.
The executive order addresses this imperative by empowering the Secretary of Commerce to prohibit transactions involving information and communications technology or services that are designed, developed, manufactured or supplied by persons owned by or controlled by or subject to the jurisdiction or direction of a foreign adversary, the official said.
Responding to questions, the official said the order was directed at any transaction involving information and communications technology or services and controlled by or subject to the jurisdiction of a foreign adversary that meets the criteria enumerated in the executive order.
Regulations issued by the Department of Commerce in the coming days will detail how determinations will be made on whether a transaction meets the criteria listed in the executive order, the official said.
The US and China are locked in a trade battle that has seen mounting tariffs, sparking fears the conflict will damage the global economy.