WASHINGTON • The Trump administration is set to issue a two-week extension tomorrow of a licence allowing US companies to continue doing business with China's Huawei Technologies, two sources said.

The extension of around two weeks is far shorter than the prior 90-day extension, and a longer extension is in the works but has not yet been finalised due to regulatory hurdles, said one source who was briefed on the matter.

After adding Huawei to an economic blacklist in May citing national security concerns, the US Department of Commerce has allowed it to purchase some American-made goods in a move aimed at minimising disruption for its customers, many of which operate networks in rural America.

The extension will be announced tomorrow, when the earlier reprieve is set to expire, the sources said, declining to be identified as the extension has not been publicly announced.

A spokesman for Huawei, the world's biggest maker of telecommunications network equipment, said that the company does not comment on rumours and speculation.

The Commerce Department declined to comment.

In blacklisting Huawei, the US government said it had a "reasonable basis to conclude that Huawei is engaged in activities that are contrary to US national security or foreign policy interests". Huawei has repeatedly denied the accusations.

The development comes amid discussions between the US and China that are aimed at coming to an initial agreement to resolve a trade war that has lasted for more than a year.

Top American and Chinese negotiators were seeking to narrow differences on the initial agreement during a Friday evening phone call, but remain split on key issues.

US President Donald Trump had not yet agreed to remove any tariffs as part of a deal, and the size of China's commitment to purchase US farm products was not yet clear, Commerce Secretary Wilbur Ross said on Friday in an interview on Fox Business Network.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin were expected to participate in the phone call with Chinese Vice-Premier Liu He.

China's reluctance to commit to a specific amount of farm purchases remains a sticking point in the talks, as is US reluctance to roll back tariffs, people briefed on the negotiations said.

The trade war between the world's largest economies has been a drag on global growth.

REUTERS