Xiaomi Sues U.S. Government Over Inclusion in Blacklist
February 09, 2021
Just days before leaving office in mid-January, President Trump’s administration released a blacklist of Chinese companies, listing the nine organizations as “Communist Chinese Military Companies.” The blacklist prohibits Americans from investing in any companies on the list and requires any American with stock in those companies to sell it within the year.
In response, Xiaomi, a major Chinese smartphone manufacturer included in the list, is now suing the U.S. Department of Defense, the U.S. Treasury Department, Defense Secretary Lloyd Austin and Treasury Secretary Janet Yellen.
Xiaomi has denied that it is in any way controlled by the Chinese government and said the ban would cause the company “immediate and irreparable harm.” After its name was added to the list, the company’s stock fell 14 percent; Huawei, another Chinese company that has faced several sanctions and was also on the blacklist, has watched its stock plummet 40 percent in recent months.
Despite the drop in its stock price, Xiaomi has been growing by leaps and bounds. The company went public in 2018 and its stock price had nearly doubled before the blacklist came out. The company has also just released its newest flagship smartphone that sports a Snapdragon 888 chipset, one of the fastest processors on the market. In fact, Xiaomi reported it sold more smartphones than Apple in the third quarter of 2020.
Despite the change in administrations, it’s unclear whether the blacklist will remain. President Biden pushed back the date the ban was supposed to go into effect from January 28 to May 27 to give his administration time to review the companies on the list. However, in general Biden has not shown a large difference in his stance on China and Chinese companies compared to Trump’s.