Instead of banning the communist hardware they could require open standards/access for interfaces, firmware and so on. Then again, sharing code does smell a bit like communism too. So let's better err on the side of freedom and ban everything.
cloud based, calling home, telemetry, video/radio surveillance, logistics exfiltration. Pretty much same arguments as in case of Chinese port cranes sending video feeds of sensitive shipments/port operations back to China, except on a global scale with high margin of deployments in security scenarios (police/fire/rescue/inspection/military).
One example is current Ukrainian situation. China gets a feed of who/where/how/what and how successful from supposedly civilian hardware.
Chinese economic influence is rapidly expanding all over the globe. In the long run, losing the US market will become less of a threat.
I'd say develop tech sovereignty despite Chinese competition. Even if it's expensive, because I think the alternative would be much more costly.