Republican lawmakers argued that Honor’s spin-off last year was meant to dodge U.S. export restrictions.
What you need to know
- U.S. Republican lawmakers have asked the Commerce Department to add Honor to its Entity List.
- The move could cut off the firm’s access to components and technology that it uses to build smartphones and networking hardware.
- The lawmakers have accused Honor to have deep ties with the Chinese government, just like its former parent company.
Huawei sold off its Honor brand late last year to a consortium of more than 30 companies in an effort to save its skin amid the U.S. economic sanctions against the Chinese firm. That effort might be in vain as some U.S. lawmakers now want Honor to be added to the U.S. Commerce Department’s Entity List.
Some 14 Republican legislators asked Commerce Secretary Gina Raimondo to include Honor Device Co. in the economic blacklist. If granted, this will designate the company as a national security threat to the U.S. That designation will also cut off its access to essential parts and technology from U.S. companies.
The lawmakers, led by Rep. Michael McCaul (R-Tex.), said that Honor’s divestiture from Huawei was intended to retain the firm’s access to U.S. components and software needed to build smartphones and networking solutions. Huawei has always been accused of having clandestine connections with the Chinese Communist Party, an accusation it has always denied.
In a letter to Raimondo, the lawmakers argued:
Analysts have noted that selling Honor gave it access to the semiconductor chips and software it relied on and would have presumably been blocked had the divestiture not gone through…The sale of Honor was not a market-based outcome, but rather orchestrated by the Party-state. The same concerns about technology exports to Honor when it was part of Huawei should apply under its current state-backed ownership structure.
If the lawmakers’ request comes to pass, it will mark a major setback against a firm that’s just beginning to recover. Honor is set to unveil new flagship devices powered by a Snapdragon 888 Plus chipset this month to take on some of the best Android phones.
