China's Commerce Ministry opposed the US move against Huawei and threatened to retaliate.
"Assuming the USA export ban on Huawei remains unresolved for the next 12-24 months, we highly doubt if China would stick to its timetable of building 5G aggressively", the USA brokerage wrote.
The Entity List designation affects both USA and non-U.S. companies doing business with Huawei.
Asked whether the government would reconsider its stance on Huawei, Prime Minister Theresa May's spokesman said: "As you know, in relation to Huawei, we are reviewing the right policy approach for 5G and when an announcement is ready the culture secretary will update parliament".
Asked whether China will retaliate by targeting certain U.S. companies, Lu said that as for foreign enterprises operating in China, there is no need for them to worry as long as their businesses are law-abiding. -China trade war that is rattling financial markets and threatening to derail a slowing global economy.
Huawei hit back by promising to "fight to the end" of the ongoing trade war.
In a paper last month, they said the company is owned by a shadowy trade union, noting that in China such unions are invariably government-controlled. Trump's executive order said the actions are necessary to prevent "economic and industrial espionage against the United States and its people", as U.S. enemies could "create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects". It will allow the Secretary of Commerce to prohibit transactions posing an "unacceptable" security risk to the U.S. or its citizens.
The move was instantly welcomed by Federal Communications Commission Chairman Ajit Pai, who called it "a significant step toward securing America's networks".
New Zealand has blocked Huawei from supplying one mobile network with 5G equipment, but has not yet ruled out all Huawei 5G contracts completely.
The decision is putting some pressure on the Asia stock markets on Thursday with mainland Chinese shares lower in the early trade. It resumed business after reaching a deal with the USA in July.
For several weeks Huawei's representatives have been telling journalists the worst of the storm has passed, as European governments and operators have resisted the U.S. campaign against the controversial Chinese vendor.
The U.S. government also said it was subjecting the Chinese company to strict export controls.
While Huawei has its own mobile processors and chips, the US semiconductor company Qualcomm is a major supplier, he said.
The United States has long accused the telecommunications equipment giant of facilitating Chinese espionage and sought to convince allies not to purchase its equipment for new 5G networks.
It came less than 24 hours after Mr Trump signed an executive order banning.
Mallory was convicted of spying, and he faces up to life in prison (he will be sentenced on Friday).
How have other countries responded?
An employee of Huawei told Nihon Keizai Shimbun that if transactions with US suppliers become more hard, it could have a bigger impact on telecommunication devices than smartphones and that implementation of 5G services in other countries could be delayed due to a delay in supply of Huawei 5G telecommunication equipment.
France, Germany and Belgium have not banned Huawei technology, but Japan has from public contracts. Huawei, in the greater context of the US-China trade negotiation, will be another chip on the board when both sides are playing the game of chicken and seeing who will budge first.