United States President Donald Trump declared a national emergency to protect United States computer networks from "foreign adversaries".
He signed an executive order which effectively bars United States companies from using foreign telecoms believed to pose national security risks.
The order does not name any company but is believed to target Huawei.
The Chinese tech giant said restricting its business in the US would only hurt American consumers and companies.
Several countries, led by the United States, have raised concerns in recent months that Huawei products could be used by China for surveillance, allegations the company has vehemently denied.
The United States has been pressuring allies to shun Huawei in their next generation 5G mobile networks.
In a separate development, 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.