Previously, the U.S. has cited national security as reason to not use Chinese equipment, alleging the equipment could provide backdoor access for the Chinese government into U.S. networks. Since 2012, Huawei has been barred from selling equipment in the U.S. because of security concerns by the U.S. government .

Huawei is under mounting international pressure about the security of its technology, and is part of the larger narrative of the U.S.-China trade battle. The U.S. has been urging diplomatic allies such as Britain, Poland and Germany to bar China -based firms from building its 5G, according to the Times.

The Trump administration has been pressuring American allies to bar Huawei and other Chinese tech firms from building the infrastructure needed to produce the next generation of ultra-high speed internet, according to the New York Times , amid a high stakes economic battle between the two countries.

Although Huawei has denied these claims, Reuters reported last month that Trump was considering an executive order to declare a national emergency that would bar U.S. companies from using telecommunications equipment made by Huawei and ZTE, two of China's biggest network equipment companies.

According to The Times report, the U.S. government sees fifth generation, or 5G, network, as part of a new arms race where the winner would gain an economic, intelligence and military edge for much of this century. The 5G standard is meant to allow more devices to be on one internet connection, with faster device communications and data transfers. Competition in the telecommunication space to move to 5G is fierce.

In a related move, China's envoy to the European Union warned on Sunday that excluding Huawei could hamper 5G development, according to a report in the Financial Times.

Trump's campaign against Huawei, the world's largest maker of networking equipment, and other Chinese firms occurs at the same time China and the U.S. try to resolve their trade disputes under a tariff cease-fire that is expected to end in March.

Trump and Chinese President Xi Jinping last month agreed to halt any new levies to give diplomacy a chance. However, when asked about trade negotiations with China last week, Commerce Secretary Wilbur Ross said, the U.S. is still "miles and miles" from a deal.

Read the full New York Times report here.

-- Reuters and CNBC's Arjun Kharpal contributed to this report.