The U.S. Justice Department is in talks about a possible resolution in the legal case against the chief financial officer of Huawei Technologies Co., according to a person familiar with the matter, a simmering dispute that has fueled a clash between the world’s two biggest economies.

No deal or terms have been reached in the discussion about the fate of Meng Wanzhou, said the person, asking not to be identified because the matter is private.

Justice officials and lawyers have discussed the prospect of a deferred prosecution agreement related to wire and bank fraud charges, which would allow Meng to return home to China from Canada in exchange for admitting wrongdoing in the criminal case, Dow Jones reported earlier, citing people familiar with the matter. She was arrested two years ago in Vancouver and has been confined to the city since then.

The Trump administration’s moves against Huawei -- particularly the arrest of Meng, the daughter of founder Ren Zhengfei -- have added to the rising tensions between the U.S. and China. In addition to the legal case, the U.S. government has pressed allies to bar their telecom carriers from using the company’s networking equipment because of alleged security risks.

Meng has so far resisted the proposal because she believes she has done nothing wrong, Dow Jones reported. The U.S. claims Meng tricked HSBC Holdings Plc into processing Iran-linked transactions that put the bank at risk of violating American sanctions.

A DOJ spokesman and Huawei representatives declined to comment. Meng’s lawyers didn’t immediately respond to requests from Bloomberg News. A spokeswoman for Canada’s Justice Minister David Lametti said, “As the matter remains before the courts, it would be inappropriate to comment further.”

China’s foreign ministry reiterated its contention that Meng was innocent and called on both U.S. and Canadian authorities to drop proceedings against her.

“The U.S., to achieve the political purpose of containing Chinese high-tech companies, orchestrated this case, and the Canadian side played its accomplice,” Foreign Ministry spokeswoman Hua Chunying told reporters during a regular news briefing on Friday. “It is 100 per cent a political incident.”

An agreement about the Huawei CFO could remove an issue that has damaged the China-Canada relationship and pave the way for the return of two Canadians who were detained in China after Meng’s arrest, Dow Jones said.

Negotiators for Meng and the Justice Department will speak again this week in hopes of reaching a deal before Donald Trump leaves office, the news service reported. Huawei officials are also holding out hope that Joe Biden’s administration will be more lenient, the report said.

--With assistance from Natalie Obiko Pearson, Gao Yuan, Kait Bolongaro and Lucille Liu.