Trump administration to ban Huawei from doing business with US government

The White House plans to ban federal agencies from conducting business with Huawei, despite legal pushback from the Chinese telecoms firm.

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The Office of Management and Budget is set to issue an interim rule this week that will lay out the steps to ensure that government agencies aren’t buying products from Huawei and several other Chinese companies.

“The Administration has a strong commitment to defending our nation from foreign adversaries, and will fully comply with Congress on the implementation of the prohibition of Chinese telecom and video surveillance equipment, including Huawei equipment,” OMB spokesman Jacob Wood said in a statement to FOX Business.

The rule, which will go into effect Aug.13, applies to Huawei, ZTE and all of their subsidiaries. By next August, the ban will extend to any government contractor doing business with Huawei.

A Huawei spokesperson told FOX Business the news was "not unexpected," but that the firm will continue to challenge the constitutionality of it in federal court.

"The [National Defense Administration Ac] and its implementing provisions will do nothing to ensure the protection of U.S. telecom networks and systems and rather is a trade barrier based on country-of-origin, invoking punitive action without any evidence of wrong doing," Huawei said in a statement. "Ultimately, it will be rural citizens across the U.S. that will be most negatively impacted as the networks they use for digital connectivity rely on Huawei."

In May, Trump signed an executive order that banned U.S. companies from using Huawei equipment; however, the administration lifted the ban at the beginning of July after Trump and Chinese President Xi Jinping agreed to a trade ceasefire at the G-20 summit in Osaka, Japan.

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The news comes in the midst of increased tensions between the U.S. and China after the Treasury Department this week designated Beijing as a currency manipulator, the latest front in the year-long trade war between the world’s two largest economies.

Last month, founder and CEO Ren Zhengfei said Huawei would take a $30 billion hit over the next two years as a result of the U.S. government ban and continuing trade spat with China.

FOX Business' Edward Lawrence contributed to this report.