According to some new reports, key security agencies in the US are debating whether to have Honor put on an export blacklist. The agencies are currently said to debate whether the company poses a threat to the US national security and whether it should be banned. Banning Honor could have a lot of negative impacts on the already bad US-China relationship.
The news was reported by The Washington Post, which says that staff members of the Pentagon and Energy Department are discussing the potential of the Honor company to be put on the entity list, while the Commerce Department and State Department were against that decision.
The final decision of whether the company poses a risk and should be put on the entity list was split among the staff members and departments. The top Republican on the House Foreign Affairs Committee said the “same concerns about technology exports to Honor when it was part of Huawei should apply under its current state-backed ownership structure.”
The Washington Post also reminds us that “Huawei sold Honor to Shenzen Zhixin New Information Technology Co., a company formed by two state-backed investors tied to Shenzen’s municipal government.”
Some of the members mentioned that Honor doesn’t make nuclear materials or any components, nor does it sell its devices in the US, which gives them enough reason not to ban the company and put it on the list. It stated that it could hurt the US economy more than it would hurt China.
It’s unclear what’ll happen to Honor in the US and across the world. If the company would be put on the entity list, it would clearly have a huge impact on its business, and it could potentially even shut it down completely, which could hurt innovation and have an even more negative impact on the US-China relationship.
What is the entity list?
It’s a list of the companies that are banned from trading with other US companies unless a special request is submitted and approved by the US government. Huawei was also put on this list, which prevents it from doing business with most American businesses. Even when companies are allowed to do some business with a few American businesses, there will be a lot of caveats and limitations in place. One such example can be demonstrated with Huawei using the latest Snapdragon 888 chips in its P50 series devices. The chip can support 5G technology by default, however, Huawei’s P50 devices are limited to be using 4G only.