Investing by US companies is no longer prohibited.
Xiaomi claims it has been officially removed from the US government’s blacklist, which barred American companies from investing in the Chinese smartphone maker.
The corporation was one of several Chinese enterprises blacklisted in the last days of Trump’s presidency because of alleged ties to the country’s military.
A federal judge in the United States has banned the Trump administration’s investment restriction in Xiaomi, the Chinese mobile giant.
In her decision, US District Judge Rudolph Contreras sided with Xiaomi, which said the investment ban was “unlawful and unconstitutional” and would suffer it “irreparable injury.”
According to Contreras, the original judgment was “arbitrary and capricious,” and that Xiaomi could obtain a complete reversal of the ban if the case progresses.
Xiaomi refuted the accusations and filed a lawsuit, claiming that the status was “illegal and unconstitutional.” A judge then temporarily halted the ruling’s implementation, citing flaws in the government’s procedures for issuing the ban.
Xiaomi ban (US)
The US Department of Defense (DoD) was expected to overturn the verdict last month, with the two companies agreeing to settle any lingering lawsuit. Xiaomi has officially verified this in a filing with the Hong Kong Stock Exchange.
“On May 25, 2021… the United States District Court for the District of Columbia issued a final order removing the United States Department of Defense’s designation of the firm as a [Communist Chinese Military Company],” Xiaomi Chairman Lei Jun remarked.
“By removing the designation, the court legally erased all limitations on U.S. citizens purchasing or holding the company’s securities.
“The company is grateful for all of its global users, partners, workers, and shareholders’ trust and support. The company emphasizes that it is an open, transparent, publicly traded, and independently managed and operated organization.”
Despite having a little presence in the United States, Xiaomi has grown to become the world’s third-largest smartphone manufacturer, with its inexpensive, feature-rich phones driving huge sales in China and worldwide.
This includes western Europe, which, with the exception of Huawei, has proven to be a difficult zone for Chinese providers to infiltrate. Xiaomi has, coincidentally, been one of the biggest beneficiaries of Huawei’s own legal problems with the US.
Xiaomi filed the case after the Trump administration put it on a US blacklist of companies accused of having ties to the ruling Chinese Communist Party in January.
This prevented any US individuals or companies from participating in Xiaomi, which already has technical backers like Qualcomm and financial behemoths like Vanguard Group and BlackRock as investors.
Xiaomi described itself as a “new and active IT business” that is publicly listed and controlled freely, according to a statement.
Xiaomi, which recently surpassed Apple to become the world’s third-largest smartphone manufacturer, had its stock rise more than 10% on the Hong Kong exchange as a result of the news.
Xiaomi isn’t the only company to have been targeted by former President Trump’s bans. Huawei and ZTE, as well as Chinese mobile applications WeChat and TikTok, were added to the ban, citing national security concerns.
So far, Xiaomi has been the sole business to avoid sanctions, with the Biden administration imposing further restrictions on US companies supplying components for Huawei’s 5G gadgets.
Although Biden’s victory in the presidential election raised hopes for a reprieve, comments from his candidate for Commerce Secretary earlier this year signalled there would be no change in policy.