The deputy-level meeting was called to discuss proposals including possible new restrictions on sales of chips made abroad to China's blacklisted Huawei Technologies [HWT.UL], a maker of telecommunications equipment, and on sales of airplane components to a Chinese aircraft maker.
Policymakers have been sharply divided ahead of a cabinet-level meeting scheduled for Feb. 28, with some officials favouring a tough line on Huawei and China while others are more focussed on prioritising trade ties with Beijing. One of the sources said that meeting had not been officially cancelled either.
Doubts swirled about whether the meetings would still occur after Trump on Tuesday blasted the proposal that would prevent companies from supplying jet engines and other components to China's aviation industry.
In a series of tweets and comments to reporters, Trump said national security concerns, often cited as the reason for U.S. curbs on Huawei, should not be used as an excuse to make it difficult for foreign countries to buy U.S. products.
The president's comments came after weekend reports by Reuters and other news media that the government was considering whether to stop General Electric Co from further supplying engines for a new Chinese passenger jet.
Trump also took aim at another proposal that would allow the U.S. government to block shipments of chips to Huawei from foreign suppliers that use U.S. equipment, in a major blow to the blacklisted firm.
"Things have been put on my desk that have nothing to do with national security, including chipmakers," Trump said on Tuesday.
Huawei was placed on a trade blacklist in May 2019 over national security concerns. That forced some companies to seek a special license from the U.S. government to sell to the world's top telecoms equipment maker. But many supply chains remained beyond the reach of U.S. authorities, frustrating China hawks and spurring the flurry of proposals to expand controls.
(Reporting by Mike Stone, Alexandra Alper and Karen Freifeld; Editing by Tom Brown and Leslie Adler)