Trump's original ban was motivated by fears Huawei and ZTE pose a threat to U.S. national security due to their alleged affiliation with the Chinese state.
Even though Huawei hasn't revealed what it plans to do next, the company did suggest last month that it could switch to Samsung for chip supplies.
However the impact of the sanctions has not been absolute.
According to administration officials, under the rule change, foreign companies that use US chipmaking equipment will be required to obtain a USA license before supplying certain chips to Huawei.
The new restrictions on Huawei come amid heightened tensions between Washington and Beijing triggered by the regime's mishandling of the pandemic. "We never intended that loophole to be there", Ross told Fox Business.
That ban inspired a "Boycott Apple" movement in China, with some companies in the country threatening to fire employees who used the company's products instead of Chinese ones. "We tend to approach Huawei with some concern but this is a measure that gives the U.S. government visibility into what is moving".
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Huawei said the U.S. was "leveraging its own technological strengths to crush" foreign companies. Since that time, and despite the fact that a number of key industrial and technological elements were made unavailable to us, we have remained committed to complying with all United States government rules and regulations.
The department said its decision "cuts off Huawei's efforts to undermine USA export control".
The Trump administration on Friday announced a new rule aimed at blocking Huawei from getting the processors it needs to make phones, networking equipment and more.
U.S. officials accuse Huawei, the world's biggest supplier of telecom network equipment and number two smartphone manufacturer, of stealing American trade secrets and say it could allow Beijing to spy on global telecoms traffic. This goes against the United States government's claim that it is motivated by network security.
The tightened regulations aim to close loopholes exploited by Huawei to use USA technology, Commerce Secretary Wilbur Ross told Fox Business.
This move will seek to interrupt a network chain worth hundreds of millions of dollars and could have a serious impact on a wide range of industries across the globe.
"In the long run, [the US ban] will damage the trust and collaboration within the global semiconductor industry which many industries depend on, increasing conflict and loss within these industries". The company spends tens of billions of dollars a year on components and technology from USA and other suppliers, purchases that might be disrupted if output of smartphones and other products is blocked.