Huawei has already signed 5G contracts with 25 countries in Europe, 10 in the Middle East, and 6 in Asia, and the company is hopeful that by signing a no-spy agreement it will see even more 5G contracts in the future.
Arguing that "foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services" the U.S. increasingly depends on, Trump's executive order on Wednesday declares an emergency over foreign-designed, developed, manufactured or supplied information and communications technologies.
It gives the secretary of commerce the power to "prohibit transactions posing an unacceptable risk to the national security", the statement adds.
The DoC will issue regulations within 150 days.
The announcement comes at a delicate time in relations between China and the United States, as the world's two largest economies levy tit-for-tat tariffs in an escalating trade battle. Industrial production and investments were also weak. Huawei is the biggest global maker of switching equipment for phone and internet companies, but it has also spent a decade fighting accusations that it facilitates Chinese spying.
Huawei's U.S. market dried up after a congressional panel first labeled the company a security risk in 2012.
Washington's broader geopolitical concerns have been heightened by a law enacted by Beijing in 2017 obliging Chinese companies to aid the government on national security issues.
The action will direct the Commerce Department, in consultation with other federal agencies, to craft an enforcement strategy.
In January, US prosecutors charged two Huawei units in Washington state, saying that they conspired to steal T-Mobile US Inc trade secrets, and charged Huawei and its chief financial officer with bank and wire fraud on allegations that the company breached sanctions against Iran. And in August 2018, president Trump signed an executive order banning US government agencies from purchasing or using telecommunications equipment from certain Chinese technology companies, including ZTE and Huawei.
US President Donald Trump has declared a national emergency over technology designed or produced by 'foreign adversaries, ' an act widely understood to target China's ZTE and Huawei in an effort to freeze them out of 5G market.
FCC Chairman Ajit Pai last week said that he is waiting for the department to express views on how to "define the list of companies" that would be prohibited under the FCC proposal.
Federal Communications Commission (FCC) Chairman Ajit Pai, who has called Huawei a threat to US security, said Wednesday that "given the threats presented by certain foreign companies' equipment and services, this is a significant step toward securing America's networks".
In August past year, Trump signed a bill that barred the U.S. government from using equipment from Huawei and China's ZTE Corp (中興通訊).