A law has been proposed that would ban the sale of US chips or other components to Huawei, ZTE Corp or other Chinese telecommunications companies that violate US sanctions or export control laws.
The proposed law was introduced shortly before the Wall Street Journal reported federal prosecutors were investigating allegations that Huawei stole trade secrets from T-Mobile US Inc and other US businesses.
The Journal said that an indictment could be coming soon on allegations that Huawei stole T-Mobile technology, called Tappy, which mimicked human fingers and was used to test smartphones.
Huawei said in a statement the company and T-Mobile settled their disputes in 2017 following a US jury verdict that found "neither damage, unjust enrichment nor willful and malicious conduct by Huawei in T-Mobile's trade secret claim".
The legislation is the latest in a long list of actions taken to fight what some in the Trump administration call China's cheating through intellectual property theft, illegal corporate subsidies and rules hampering US corporations that want to sell their goods in China.
In November, the US Department of Justice unveiled an initiative to investigate China's trade practices with a goal of bringing trade secret theft cases.
At that time, Washington had announced an indictment against Chinese chipmaker Fujian Jinhua Integrated Circuit Co Ltd for stealing trade secrets from US semiconductor company Micron Technology relating to research and development of memory storage devices.
Jinhua, which has denied any wrongdoing, was put on a list of entities that cannot buy goods from US firms.
The proposed law and investigation are two of several challenges that Huawei, the world's biggest telecommunications equipment maker, faces in the US market.
In addition to allegations of sanctions-busting and intellectual property theft, Washington has been pressing allies to refrain from buying Huawei's switches and other gear because of fears they will be used by Beijing for espionage.
Huawei's founder, Ren Zhengfei, denied this week that his company was used by the Chinese government to spy.
Canada detained Ren's daughter, Meng Wanzhou, who is Huawei's chief financial officer, in December at the request of US authorities investigating an alleged scheme to use the global banking system to evade US sanctions against Iran.