Washington has told allies not to use Huawei's technology to build new 5G networks because of worries it could be a vehicle for Chinese spying, an accusation the company has denied.
The move would be aimed at addressing perceived dangers posed by Chinese tech maker Huawei, which the U.S. has accused of spying on behalf of the Chinese government.
China's Foreign Ministry accused the USA of "deliberately discrediting" Chinese companies.
Chinese telecom giant Huawei is willing to sign a "no-spy" agreement with countries including Britain, the firm's chairman said on Tuesday, as the head of North Atlantic Treaty Organisation said Britain must preserve secure mobile networks.
Both Huawei and ZTE have also been targeted by the USA for alleged schemes to dodge American sanctions on Iran.
Canadian authorities last December arrested Huawei's Chief Financial Officer Meng Wanzhou at the request of the US, which seeks her extradition over allegations of violating Iran sanctions.
The U.S. has been trying without success to persuade other governments to exclude to exclude equipment made by Huawei from super-fast 5G mobile networks that will connect billions of devices.
"There are no Chinese laws requiring companies to collect intelligence from a foreign government or implant back doors for the government".
The administration official said Wednesday that the Commerce Department was expected to take as long as six months to fashion an approach to the order, so there might not be an immediate effect. The Chinese have accused the Trump administration of unfairly protecting American and European companies from competition with Huawei, which generally sells products for cheaper.
The order would also further intensify the trade war between China and the USA, which has been heating up in recent days.
It's no secret that USA's defense department is having some issues with the Chinese telecommunication giant, Huawei.
The Federal Communications Commission voted unanimously to deny China Mobile Limited's bid to provide telecommunications services within the United States last week.
The Federal Communications Commission in April 2018 voted to advance a proposal to bar the use of funds from a $9 billion government fund to purchase equipment or services from companies that pose a security threat to USA communications networks.
-With assistance from Todd Shields and Dandan Li.