The US Commerce Department is expected to extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from US companies so that it can service existing customers, two sources familiar with the situation said.
The “temporary general licence” will be extended for Huawei for 90 days, the sources said.
Commerce initially allowed Huawei to purchase some American-made goods in May shortly after blacklisting the company in a move aimed at minimising disruption for its customers, many of which operate networks in rural America.
An extension will renew an agreement set to lapse on August 19, continuing the Chinese company’s ability to maintain existing telecommunications networks and provide software updates to Huawei handsets.
The situation surrounding the licence, which has become a key bargaining chip for the United States in its trade negotiations with China, remains fluid and the decision to continue the Huawei reprieve could change ahead of the Monday deadline, the sources said.
US President Donald Trump and Chinese President Xi Jinping are expected to discuss Huawei in a call this weekend, one of the sources said.
Huawei did not have an immediate comment. China’s foreign ministry did not immediately respond to a faxed request for comment.
When the Commerce Department blocked Huawei from buying U.S. goods earlier this year, it was seen as a major escalation in the trade war between the world’s two top economies.
The US government blacklisted Huawei alleging the Chinese company is involved in activities contrary to national security or foreign policy interests.
As an example, the blacklisting order cited a criminal case pending against the company in federal court, over allegations Huawei violated U.S. sanctions against Iran. Huawei has pleaded not guilty in the case.
The order noted that the indictment also accused Huawei of “deceptive and obstructive acts”.
At the same time the United States says Huawei’s smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied.
The world’s largest telecommunications equipment maker is still prohibited from buying American parts and components to manufacture new products without additional special licenses.