US lawmakers on the Republican side want the US Department of Commerce to add Honor to the list of US entities, just like the previous parent company Huawei. A group of 14 Republican politicians in the US House of Representatives asked the US Commerce Department to add the former Huawei unit to the government's economic blacklist.
The group, led by Republican Michael McCaul, a ranking member of the House Foreign Affairs Committee, noted that the sale was made in an attempt to evade US export control policies. US export control policies are aimed at keeping US technology and software out of the hands of the Chinese Communist Party. Huawei was on the verge of ousting smartphone giant Samsung when its fate was quickly turned upside down after it was added to the US Entity List. No longer part of the world's top five smartphone brands, Huawei has seen many of its businesses and affiliates banned from buying or licensing US products, including software. It also had to sell Honor to save from the same fate. But all this may be worthless for some US lawmakers.
Lawmakers have argued that even with a new owner, Honor still suffers from the same state-backed ownership structure as Huawei. Accused of being a national security threat, Huawei was placed on a list of US entities that prevented it from buying the supplies, technology, and software it needs to make smartphones or networking devices.
The ban extended to many companies and subsidiaries of Huawei, including Honor, which accounted for nearly half of annual smartphone sales.
Honor is still at risk entity list
Honor wanted to escape this punishment, and the only way was to distance itself from its parent company, Huawei. Huawei ended the sale of Honor late last year to a consortium of 30 companies allegedly linked to Honor. This was clearly a strategy to allow Honor access to US products. The smartphone maker has signed deals with the likes of Qualcomm and Google.
It recently launched the Honor 50 series last June with a Snapdragon chip and Google Play apps. The lawmakers explained that the sale of Honor gave it access to the semiconductor chips and software it depends on. It would have been banned had the sale not taken place.
The Commerce Department, under the new Biden administration, previously said it had no plans to lift its ban against Huawei.
A spokesman for the US Department of Commerce said the agency appreciates the views of these members of Congress. He noted that the Section was constantly reviewing the information available to identify potential additions to the Entity List.
The occurrence of such a thing could certainly deal a devastating blow to Honor. Especially considering how the brand has just recovered from a turbulent 2021. Whether because of Huawei or because of the epidemic.