Donald Trump has declared a "national emergency" which will give the US government sweeping powers to prevent American companies doing business with foreign suppliers of telecommunications equipment including Huawei.
Mr Trump signed an executive order which accused foreign powers of targeting US technology, and industrial espionage.
It cleared the way to ban Huawei from the US's 5G networks.
The US has repeatedly claimed that Huawei's equipment could be used for spying by China.
Mr Trump had already barred the US government from use of Huawei equipment, but has now extended that to all US companies.
The president's order did not specifically name China or Huawei but will heighten tensions with Beijing amid an ongoing trade war.
Mr Trump's commerce secretary will be able to stop deals involving equipment built by a foreign power when there is an "unacceptable risk to US security or public services.
Donald Trump and Chinese president Xi Jinping
Sarah Sanders, the White House press secretary, said: "The president has made it clear that this administration will do what it takes to keep America safe and prosperous.
"We 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."