To give an idea of Huawei's rising clout, the tech company previous year posted sales of 600 billion yuan ($95 billion).
Trump's order made no mention of China, but an earlier letter from the US Treasury warned that a takeover might hurt US leadership in 5G, or fifth-generation wireless networks now being deployed, and consequently pose a threat to US security.
Broadcom had gone directly to shareholders after a previous offer was rejected by Qualcomm.
Trump said that his decision was based partly on recommendations made by the Committee on Foreign Investment in the United States (CFIUS), an inter-agency committee headed by the US Treasury Department that investigates "transactions that could result in control of a USA business by a foreign person".
Qualcomm and Huawei have already conducted joint tests on 5G technology, and both companies are part of an global 5G alliance that includes Nokia, Ericsson and Intel.
"Over time that would mean USA government and US technology companies could lose a trusted USA supplier that does not present the same national security counterintelligence risk that a Chinese supplier does", said Brian Fleming, an attorney at Miller & Chevalier and former counsel at the Justice Department's national security division.
Broadcom said in a statement: "Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns". The deal had been under scrutiny from regulators and others, and would have seen the Singapore-based Broadcom officially take over the USA -based Qualcomm.
He had pledged a $1.5bn investment in 5G in the U.S. if Broadcom secured the takeover.
Which company will lead the 5G race now that the deal has been prevented? Qualcomm is at the forefront of development of modems and other devices that would provide the first wide-bandwidth 5G data connections. According to Bloomberg, the company is now working to shift its headquarters from Singapore to the U.S. The transition is expected to be completed by April 3. "Articulation of the potential national security concerns, in significant part, is classified".
The Trump administration isn't exclusively concerned about foreign technology-based companies. The smartphone SoC and cellular modem company has already been through the ringer with regulators of late, it's trying to get approval for its own purchase of NXP finalized (China still has to sign off), and it felt Broadcom's own offer wasn't a good one.
Currently, the company is still based in Singapore, despite having a massive presence in San Jose, California. If the acquisition was successful, Broadcom would have been able to push out its 5G technology even faster than anticipated. AT&T, reportedly under political pressure, dropped out from a deal with Huawei at the last minute to distribute Huawei's new Mate 10 Pro phones in the U.S. Previously, the administration blocked China's Ant Financial Services Group takeover attempt for MoneyGram International Inc.