The extension renews 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 logo of Huawei Technologies is pictured in front of the German headquarters of the Chinese telecommunications giant in Duesseldorf, Germany, February 18, 2019.
The logo of Huawei Technologies is pictured in front of the German headquarters of the Chinese telecommunications giant in Duesseldorf, Germany, February 18, 2019. (Reuters)

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, sources familiar with the situation said.

The "temporary general licence" will be extended for Huawei for 90 days, the sources said.

The extension renews 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 US 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.

The world's largest telecommunications equipment maker is still prohibited from buying American parts and components to manufacture new products without additional licence approvals.

US government blacklisted Huawei alleging the Chinese company is involved in activities contrary to national security or foreign policy interests.

US says Huawei's smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied.

The Commerce Department late on Friday declined to comment, referring to Commerce Secretary Wilbur Ross‚ comments to CNBC television earlier this week in which he said the existing licences were in effect until Monday.

Asked if they would be extended he said: "On Monday I'll be happy to update you."

Source: Reuters