Washington: The Trump administration hit Chinese telecoms giant Huawei with severe sanctions on Wednesday, adding another incendiary element to the U.S.-China trade dispute just as Treasury Secretary Steven Mnuchin said he would visit China soon for more talks.

The Commerce Department said it was adding Huawei Technologies Co Ltd and 70 affiliates to its ‘Entity List’ - a move that bans the company from acquiring components and technology from U.S. firms without government approval.

Commerce Secretary Wilbur Ross said in a statement that President Donald Trump backed the decision to ‘prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests.’

Trump earlier in the day signed an executive order barring U.S. companies from using telecommunications equipment made by firms deemed to pose a national security risk.

While the order did not specifically name any country or company, U.S. officials have previously labeled Huawei a ‘threat’ and lobbied allies not to use Huawei network equipment in next-generation 5G networks.

Huawei, which denies its products pose a security threat, said it was ‘ready and willing to engage with the U.S. government and come up with effective measures to ensure product security.’

It said restricting Huawei from doing business in the United States would ‘limit the U.S. to inferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deployment and eventually harming the interests of U.S. companies and consumers.’

Speaking at a U.S. Senate Appropriations subcommittee hearing, Mnuchin characterized two days of high-level talks with Chinese officials in Washington last week as constructive.

‘My expectation is that we will go to Beijing at some point in the near future to continue those discussions,’ he said. ‘There’s still a lot of work to do.’

He did not say when his China trip might take place.

Shares in Huawei suppliers in China skidded on the news as markets opened in Asia, with Luxshare Precision Industry down as much as 6.1%. Shares in smaller Chinese Huawei rival ZTE Corp also tumbled.

The Trump administration’s rhetoric toward China had cooled in recent days after another round of tit-for-tat tariffs between the world’s two largest economies and a selloff on global stock markets.

On Tuesday, Trump denied talks with China had collapsed and sounded an optimistic note about the chance of a deal, saying he had an ‘extraordinary’ relationship with Chinese President Xi Jinping, whom he plans to meet at a G20 summit in Japan next month.

Trump also urged China to buy more U.S. farm products.

U.S. agricultural goods have been targeted by China’s retaliatory tariffs, and American farmers, a key political constituency for Trump, are worried.

The U.S. Department of Agriculture has paid $8.52 billion directly to farmers as part of a 2018 aid program designed to offset losses from tariffs imposed by China and other trading partners, a spokesman for the agency said on Wednesday.

The Trump administration had pledged up to $12 billion in aid to help offset losses resulting from Chinese tariffs.