The US Federal Communications Commission (FCC) has ordered certain US telecommunications companies to remove Huawei equipment from their network.
The FCC has also started the process of revoking China Telecom's authorisation to operate in the US.
The "rip and replace" order is the latest US move against Huawei made on national security grounds.
The order includes subsidies for smaller carriers for removing and replacing the equipment.
However, the commission can't actually implement the reimbursements without the approval of funding from congress.
FCC chairman Ajit Pai said Huawei has close ties to the Chinese military and intelligence communities as well as the Communist Party, and those ties are at "every level of the company—all the way up to its founder".
"The concerns about Huawei aren't just hypothetical: Independent entities have identified numerous security vulnerabilities in Huawei equipment and found it to be less secure than that of other companies—perhaps deliberately so," Mr Pai said.
He said Huawei is also subject to "sweeping" laws compelling the company's assistance and cooperation with Chinese intelligence services and forbidding the disclosure of that assistance.
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