A Huawei company logo at the Shenzhen International Airport in Shenzhen, Guangdong province, China. File photo/ Reuters

China’s Huawei has mounted a legal challenge against the US Federal Communications Commission (FCC) after the body designated the technology giant as a security threat and tried to bar it from a government subsidy program.

The FCC last month voted unanimously to designate Huawei Technologies Co Ltd and peer ZTE Corp as national security risks, barring their US rural carrier customers from tapping an $8.5 billion government fund to purchase Huawei or ZTE telecommunications equipment.

Huawei filed a petition with the Fifth Circuit Court in New Orleans challenging the FCC decision, the firm’s chief legal officer Song Liuping said in a statement on Thursday.

The FCC argued the companies’ ties to China’s government and military apparatus, and Chinese laws requiring that such companies assist the Chinese government with intelligence activities, pose a US national security risk.

It also voted to propose requiring carriers remove and replace equipment from Huawei and ZTE in existing networks.

“Banning a company like Huawei, just because we started in China - this does not solve cyber security challenges,” Song said in the statement.

Karl Song, vice president of Huawei’s corporate communications department, said the FCC rule threatened improving connectivity in rural America, and would cost hundreds of millions of dollars and even force some small carriers to go bankrupt.

US President Trump in May placed Huawei on the country’s trade blacklist, citing national security concerns, which banned companies from supplying Huawei with US components without special licenses.

The US government has also lobbied other governments to ban Huawei equipment, ratcheting up tension between China and the United States as they engage in a tit-for-tat trade war.

Reuters