The original order was recently extended: that order relied on the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, U.S Code. The order does not specifically mention Huawei, but the inclusion of Huawei is a result of determinations by the
Secretary of Commerce (Secretary), in consultation with the Secretary
of the Treasury, the Secretary of State, the Secretary of Defense, the
Attorney General, the Secretary of Homeland Security, the United
States Trade Representative, the Director of National Intelligence,
the Administrator of General Services, the Chairman of the Federal
Communications Commission, and, as appropriate, the heads of other
executive departments and agencies
This is analogous to orders to not trade with Iran. If business X has absolutely no connection to the US, then an order for X to not do business with some other entity is effectively unenforceable. However, TSMC does do business in the US, for example is is listed on the NYSE, and it does business with many US companies. Jurisdiction exists when a government claims jurisdiction. Enforcement exists where a government can force its will on others, the US can’t enforce its will on China or Huawei but it can on companies operating or based in the US.