US President Donald Trump has declared an emergency to protect US computer networks from “foreign adversaries”.
The move is believed to target Chinse telecom giant Huawei.
The President signed an executive order which effectively bars US companies from using foreign telecoms believed to pose national security risks.
Though no company was named in the order, it is believed to be Huawei.
The Chinese tech giant responded to the fresh US move, saying said restricting its business in the US will 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
The US has been pressuring allies to shun Huawei in their next-generation 5G networks.
In a separate move, the US commerce department added Huawei to its “entity list” – a move that bans the company from acquiring technology from US firms without government approval.
The moves are likely to worsen tensions between the US and China, which had already escalated this week with tariff hikes in a trade war.
Huawei has been at the epicentre of the US-China power struggle that has dominated global politics over the past year.
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.