5G has become a potential source of strain as Brazil plans a tender next year to upgrade mobile network in Latin America's biggest economy.
The spat came on the same day Sweden banned Huawei and fellow Chinese firm ZTE from its 5G network
The United States promised Brazil $1 billion (roughly Rs. 7,300 crores) in financing toward US imports Tuesday, adding a carrot to its campaign to convince the country not to use China's Huawei to develop its 5G network.
The deal includes loans, guarantees and insurance to fund Brazilian imports of US goods and services, "especially in the telecommunications area and the important 5G modern telecommunications network," said US National Security Advisor Robert O'Brien, who presided over the signing during a visit to Brazil.
Speaking after the deal was signed, President Jair Bolsonaro reiterated his support for the re-election of his US counterpart Donald Trump, the latest shout-out from the far-right leader sometimes called the "Tropical Trump."
"God willing, I hope to attend the inauguration of the soon-to-be re-elected president of the United States," Bolsonaro said.
The United States and Brazil have cosied up under Trump and Bolsonaro, whose shared penchant for hardline policies, vitriolic rhetoric and social media have drawn comparisons.
But the 5G issue has become a potential source of strain as Brazil plans a tender next year to upgrade the mobile network in Latin America's biggest economy.
China is Brazil's top trading partner, and Huawei has emerged as the leading supplier of fast and cheap next-generation telecoms infrastructure.
The Trump administration warns that the firm is a security threat, accusing it of passing data and intelligence to the Chinese government.
The Chinese embassy in Brasilia lashed out angrily at comments to that effect by US Secretary of State Mike Pompeo and O'Brien during his visit.
"They spread lies about China in bad faith, fabricating a so-called 'Chinese threat' and attacking China's 5G technology," a spokesman said in an interview posted on the embassy's website.
The spat came on the same day Sweden banned Huawei and fellow Chinese firm ZTE from its 5G network.
It was the latest US ally to do so, amid a pressure campaign from the Trump administration to ostracise China from the world telecoms market.
Britain banned mobile providers in July from using Huawei equipment in their new 5G networks and ordered them to remove existing equipment made by the company.
France has also placed heavy restrictions on the use of Huawei equipment.
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