US agencies reportedly split over blacklisting Huawei hardware spinoff

Federal agencies like the Pentagon and Commerce Departments can’t decide whether to place Huawei’s former smartphone company, Honor, on the US’s export blacklist, according to a Washington Post report on Sunday.

According to The Post, top officials at the Commerce, State, and Energy departments, along with the Pentagon, met last week to decide whether to place the smartphone manufacturer on the US’s entity list. Pentagon and Energy staffers supported placing the company on the list while Commerce and State Department officials opposed the idea. If blacklisted, Honor would be unable to receive US tech exports without a license.

Huawei launched Honor in China in 2013 to compete against other popular smartphone companies like Xiaomi. Nearly three years later, Huawei announced that the Honor 8 would be available in the US — a test to see whether the company could bring its huge Chinese popularity overseas and become a competitive threat to companies like Apple. Last month, Honor announced its first flagship phones since being sold off from Huawei, arriving first in China to be released globally at a later date.

The agency divide over Honor shows how the Biden administration is struggling to address the US’s competitive threats against China. In 2019, the Trump administration kicked off this fight by declaring Huawei, one of the world’s largest telecommunications and technology makers, a national security threat. Later, Huawei’s Chief Finance Officer Meng Wanzhou was indicted for bank and wire fraud and is currently awaiting an extradition ruling in Canada.

Republican lawmakers have been pushing the Biden administration to use export controls like the Commerce Department’s entity list to curb China’s rise as a competitive threat in the tech industry. Last month, Rep. Michael McCaul (R-TX) led a letter with more than a dozen other lawmakers calling on Commerce Secretary Gina Raimondo to place Honor on the entity list, accusing Huawei’s January sale of the company as equating to “export control evasion.”

According to Huawei, the sale was prompted in part due to the Trump administration’s 2019 entity listing which made it more difficult for the company to purchase the software licenses and processors needed to build the Honor devices.