The US blockade on Huawei was the major reason for the company selling off its Honor smartphone unit last year. As the US restriction led to a massive decline in the fortunes of the company, Huawei sought for several options to remain afloat including diversification of its core business model and shedding off some of its business units. Selling off the Honor brand seemed like a masterstroke as Huawei has begun to experience a rebound in its fortunes while Honor is also having a positive growth trajectory.
Honor however has been under scrutiny in the US, under suspicion that it remains a part of Huawei. Last week, personnel at four United States agencies were split on whether to put Honor on the US Commerce Department’s entity list, which will restrict technology transfer from US companies to Honor without express licenses from the Commerce Department. There is still a lack of consensus among the agencies on whether Honor, a former Huawei business unit posed a significant threat to U.S. national security.
Inside sources have hinted that the Pentagon and Energy Department were in support of placing Honor on the blacklist, while the Commerce and State Departments opposed the move.
This has not been the first time news of the possible blacklist of Honor has been voiced. Recently, some House Republicans had also mooted the idea of extending Huawei’s ban to Honor. There is a growing suspicion especially in the US political circuit that Honor remains an appendage of Huawei. There are thus political and economic considerations in combination with the critical national security considerations.
Huawei had continued to deny links with the Chinese government, likewise Honor. The company was on an aggressive roll in its deployment and development of 5G technology when it was suddenly hit by the US blacklisting, leading to a downward spiral of fortunes since 2019.
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(source)
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