The new rule is designed to block Huawei's access to commercially available chips made with tools acquired from the US.Reuters

Striking a deadly blow to the Chinese tech champion, Huawei, the Donald Trump administration expanded its sanctions on the firm, a move aimed at further limiting the tech giant's access to computer chips and other technology.

"We don't want their equipment in the United States because they spy on us," Trump said on Monday.

"And any country that uses it, we're not going to do anything in terms of sharing intelligence," Trump added.

The Commerce Department's new rules, rolled out Monday, will further block Huawei from accessing chip technology. A statement from the Commerce Department added 38 Huawei affiliates around the world to the "entity list," claiming that the company was using international subsidiaries to circumvent the sanctions which prevent the export of US-based technology.

Washington cut off Huawei's access to US components and technology, including Google's music and other smartphone services in 2019.

Those penalties were tightened in May when the White House barred vendors worldwide from using US technology to produce components for Huawei.

A Huawei executive said this month that the company has started running out of processor chips to make smartphones as a result of those sanctions, and may have to stop production of its own advanced chips.

But the Commerce Department said Monday that more restrictions were needed because Huawei has "continuously tried to evade" the earlier sanctions by using technology supplied by third parties.

New rule is designed to block Huawei's access

The new rule is designed to block Huawei's access to commercially available chips made with tools acquired from the US.

"The new rule makes it clear than any use of American software or American fabrication equipment to produce things through Huawei is banned, and requires a license," Commerce Secretary Wilbur Ross told Fox Business on Monday.

"It's really a question of closing loopholes to prevent a bad actor from access to US technology, even if they try to do it in a very indirect, very tricky manner."

Huawei has been at the center of rising US-Chinese tensions over technology and security.

Donald Trump took credit for Britain's recent move to backtrack on plans to give the company a role in the UK's new high-speed mobile phone network.

"We said we love Scotland Yard very much but we're not going to do business with you because if you use the Huawei system that means they're spying on you," Trump said. "That would mean they're spying on us."

(With agency inputs)