The US and its allies have decided not to procure Huawei equipment for national security related telecommunication system, National Security Advisor John Bolton said Sunday as the Chinese telecom giant is locked in an escalating legal dispute with America.

On Thursday, Huawei filed a lawsuit in Texas, where its US headquarters are based, alleging that a US government ban on its products and services was unconstitutional. Huawei's chief financial officer, Meng Wanzhou, also faces charges in the US over alleged fraud and violation of US sanctions on Iran.

"The US along with a number of other countries, allies and friends of ours, sometime back decided not to procure Huawei equipment for our national security-related telecommunication systems, and I think for very, very good reasons, Bolton told ABC news.

People sometimes call the concern the Manchurian chip problem, that something gets into the telecommunication system that can be activated down the road, he explained, describing it as a very serious threat.

If an American company ,with an American CFO, had done what the Justice Department accused Huawei of, we'd throw the book at them. It's just as simple as that. So I don't think anybody is going to argue -- at least, I would be surprised if they did -- that a foreign company or a foreign CFO ought to get better treatment than an American company and an American CFO would get, Bolton said.

Chinese Foreign Minister last week said Beijing will take all necessary measures to defend the rights and interests of Chinese companies such as Huawei.

The US lobbied allies to restrict the company from supplying equipment for 5G mobile technology networks. The company, the world's largest telecommunications equipment provider and a global leader in 5G and smartphones, has come under increasing scrutiny over possible connections with the Chinese government.

The company has insisted that it has never given and would never give information to the Chinese government. Reiterating that Huawei poses a "significant threat" to the US national security, Bolton said that is the reason why the White House has suspended US government procurement of their systems.

"This is particularly applicable in fifth-generation telecommunications, where the presence of suspect material really almost anywhere in the system, not at the key communications nodes, but throughout the system, can be used for espionage or disruption purposes," he alleged.

This is the Manchurian chip issue. This is a very serious problem. We're in intense discussions, absolutely unrelated to trade issues, with friends and allies and partners all over the world on how to deal with this. Nobody should minimize how serious this is, he said.

It's not just China we're worried about, let's be clear. We're worried about compromising the security of sensitive American communications really on a global basis, he asserted.

President Donald Trump, he said, has identified structural issues, the enormous damage that's been done to the US over a period of decades by Chinese stealing intellectual property and forced technology transfers.

This is critical to reversing the pattern, to get this right in the negotiations. So I don't think it should be surprising that it's complex and that China is faced with some very difficult choices here, he said.

That's what our negotiators have been pursuing. And that's really much of the work that remains to be done, not only how to reach agreement on these issues, but how to enforce them over the long term, he said in response to a question.

The way to handle China for the US is the existential security question of the 21st century, he said. It's identified as such in the president's national security strategy. It's been a focus of much of the preparation of the budget request that will be announced here shortly. We're looking exactly at things like what China's doing in the South China Sea,he said.