The order doesn't outright ban US sales by the companies, but would give greater authority to the Commerce Department to review products and purchases by firms connected to adversarial countries, including China.
According to a Reuters report Wednesday, president Donald Trump is expected to sign an executive order that would bar usa companies from using telecommunications equipment made by companies which pose a national security risk.
Estimates suggest around a fifth of rural carriers in the United States use either equipment made by Huawei or, another Chinese company, ZTE, although many of their larger telecoms companies have already cut ties. This has always been denied by Huawei.
The Trump administration has been pressuring foreign governments to ban Huawei from the pending networks amid allegations that the firm acts as a conduit for Chinese espionage and is closely tied to the communist government, claims the company has denied.
It gives the secretary of commerce the power to "prohibit transactions posing an unacceptable risk to the national security", the statement adds.
Huawei is willing to sign no-spy agreements with governments, including Britain, the Chinese telco company's chairman said on Tuesday (May 14), amid USA pressure on European countries to shun the firm over espionage concerns.
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The announcement comes at a delicate time in relations between China and the USA, as the world's two largest economies levy tit-for-tat tariffs in an escalating trade battle. Huawei is pushing to take a global leadership position, but many American officials suspect the company's products could be used by Beijing to spy on Western governments and companies.
The Secretary of Homeland Security is also required to prepare a written evaluation of hardware, software, and services vulnerabilities that could threaten USA national security within 80 days.
The Australian government banned Huawei in August previous year.
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.
In January, US prosecutors said Huawei had conspired to steal T-Mobile trade secrets, and also charged Huawei and its chief financial officer with bank and wire fraud on allegations that the company violated sanctions against Iran.
While the big U.S. wireless companies have already cut ties with Huawei, an estimated one quarter of small rural carriers continue to rely on both Huawei and ZTE switches because they tend to be cheaper.