Federal Communications Commission Chairman Ajit Pai said Tuesday that Chinese telecommunications giants Huawei and ZTE have ties to the Chinese Communist Party and warned U.S. wireless providers about the risks of doing business with them.

“What we found was that these two companies, Huawei and ZTE, had ties to the Chinese Communist Party, had ties to China’s military apparatus, the People’s Liberation Army,” Pai told "Lou Dobbs Tonight" on Tuesday. “And in addition to that, they are obligated, under Chinese law, if they get a request from the Chinese secret police, the intelligence services, they must comply with it, and they are prohibited from disclosing the fact of that request to any of their customers.”

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The FCC on Tuesday designated Huawei and ZTE as national security threats and banned U.S. companies from using subsidies to buy Huawei's and ZTE's equipment. The rule was previously approved in November, but Huawei and ZTE were given the opportunity to prove they aren’t security threats.

The move may complicate business for smaller wireless and internet providers in America, as they have been frequent customers of Huawei and ZTE. The Rural Wireless Association, which represents 50 wireless providers with less than 100,000 subscribers, said in a December 2018 filing that a fourth of its membership at that time was using equipment from Huawei and ZTE.

Pai said Tuesday that the FCC has been working with Congress on “rip and replace” legislation to get rid of the problematic equipment and the risks outweigh the benefits of working with these Chinese companies.

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“If you’re talking about small rural carriers in the United States, it’s not a risk that we believe is worth taking, that could allow for all kinds of intrusions, the installation of back doors, infection of our networks with malware, theft of intellectual property,” Pai told FOX Business. “There are all kinds of risks that are simply not worth taking here in the United States, and I would argue in the rest of the world.”

FCC Commissioner Geoffrey Starks also reiterated Tuesday the need to get rid of the equipment already in place across America that poses a security threat.

“Today’s actions will help secure our networks against new threats from Huawei and ZTE equipment,” Starks said in a statement. “We must not, however, lose sight of the untrustworthy equipment already in place. Last year, I called for the FCC to find the untrustworthy equipment in our networks, to fix the problem by instituting a replacement program, and to fund the replacement of that equipment. Find it. Fix it. Fund it. The Commission has taken important steps toward identifying the problematic equipment in our systems, but there is much more to do.”