The Trump administration has said it does not want one of the world’s biggest phone carriers, China Mobile, to provide telecom services within the US, citing national security concerns.
State-owned China Mobile applied to the US Federal Communications Commission (FCC) for a licence to do so in 2011.
But the US Department of Commerce has recommended the licence request be denied.
The advice comes amid rising trade tensions between the US and China.
"After significant engagement with China Mobile, concerns about increased risks to US law enforcement and national security interests were unable to be resolved," said the assistant secretary for communications and information at the Commerce Department, David J Redl.
"Therefore, the executive branch of the US government, through the National Telecommunications and Information Administration [NTIA]... recommends that the FCC deny China Mobile’s Section 214 license request."
Neither China Mobile nor the FCC were immediately available for comment on what their next steps would be.
The move by the NTIA - an arm of the Commerce Department that advises US President Donald Trump on telco and information issues - comes at a time of heightened tensions between the US and China over trade and telecom issues.
