The Senate passed a bill that would prohibit the use of federal funds to purchase equipment from Huawei and provide $1 billion for rural telecom companies to replace equipment from the Chinese tech giant that the U.S. has blacklisted.
Bipartisan lawmakers on the House Committee on Energy and Commerce, including Chairman Frank Pallone Jr., D-N.J., ranking member Greg Walden, R-Ore., and Reps. Doris Matsui, D-Calif., and Brett Guthrie, R-Ky., sponsored the bill.
"The existence of Huawei's technology in our networks represents an immense threat to America's national and economic security," the lawmakers said in a joint statement.
"This bipartisan bill will help communities across the country by bolstering efforts to keep our communications supply chain safe from foreign adversaries and other dangerous actors, while helping small and rural providers remove and replace suspect network equipment," the statement added.
The bill already had passed the House in December 2019, and is now on its way to the president's desk.
The Telecommunications Industry Association welcomed the Senate's decision, saying it would help the U.S. lead the way in 5G security.
David Stehlin, the trade group's CEO, called it "a critical step in securing our network and ensuring the integrity of the telecommunications supply chain as we usher in the 5G era."
Stehlin added that the group also welcomes "efforts for the replacement of equipment that raises national security risks with equipment from trusted supplier."
Huawei argued that the legislation would hurt only customers and businesses, especially in rural areas.
"Unfortunately, the legislation that was just passed is considerably underfunded, would take longer than anticipated and could put at risk some of our customers, who serve the most underserved areas," a company spokesperson told ABC News in a statement. "This legislation will simply reduce the ability of broadband providers to provide the most secure network equipment and in turn hurt local consumers and businesses."
Huawei also argues that the bill "ignores the alternative proposals put forth by our rural customers which provided a more holistic approach and will increase the network security profile of all U.S. networks at a fraction of the cost outlined in the legislation."
The statement continued: "While the intention of this bill is to provide a robust and secure network for all Americans, if implemented the legislation passed today will fall woefully short."
The passage of this bill through the Senate is the latest in an escalation of tensions between the U.S. and the Chinese telecom giant.
Earlier this month, federal authorities hit Huawei with racketeering and a litany of other charges, ranging from misappropriating intellectual property from U.S. tech companies to bypassing sanctions and doing business with North Korea and Iran.
Huawei vowed to fight the charges, with a spokesperson saying at the time: "The government will not prevail on its charges, which we will prove to be both unfounded and unfair."