Honor is still in danger of being added to the US Entity List

Ewdison Then - Aug 9, 2021, 10:16pm CDT
Honor is still in danger of being added to the US Entity List

Huawei was almost on the verge of toppling smartphone giant Samsung when its fate quickly turned upside down after it was added to the notorious US’ Entity List. No longer even part of the world’s top five biggest smartphone brands, Huawei saw many of its businesses and subsidiaries banned from buying or licensing US products, including software. It also had to sell of Honor to save it from the same fate, but that might all be for naught as far as some US lawmakers are concerned.

Accused of being a threat to national security, Huawei was placed under the US’ Entity List that blocked it from buying the supplies, technologies, and software it needs to make smartphones or networking hardware. That ban extended to Huawei’s many businesses and subsidiaries, including Honor, which made up almost half of its annual smartphone sales. Naturally, Honor wanted to survive this punishment, and the only way out was to distance itself from its parent.

Huawei finalized the sale of Honor late last year to a consortium made up of 30 companies supposedly attached to Honor. This was clearly a strategy to allow Honor to have access to US products as the smartphone maker immediately inked 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 inside.

Now US lawmakers on the Republican side of the fence want the US Commerce Department to add Honor to the dreaded list, just like its former parent Huawei. Their argument is that the sale was clearly designed to skirt US restrictions that blocked the Chinese Communist Party (CCP) from getting access to US technologies. They argued that even under a new owner, Honor still suffers from the same state-backed structure as Huawei.

The Department of Commerce, under the new Biden administration, previously said that it has no plans on lifting Huawei’s bans. It is still reviewing information, including the possible additions to that list. It would definitely deal a devastating blow to Honor if it comes to pass, especially considering how the brand is just recovering from a tumultuous 2021, both because of Huawei and because of the pandemic.

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