XIAOMI, THE SMARTPHONE-MAKER blacklisted by the Trump administration in its waning days in office as a Chinese military-owned company, has got itself off the list after suing the US federal government.
The two sides have now agreed to an out of court settlement under which the US Department of Defence will ‘vacate’ the designation. Xiaomi had secured a US District court-ordered stay on implementing the blacklisting in March, with the US side offering only circumstantial evidence in support of the blacklisting.
The effect of being put on the list is to prevent US investment in the company and to remove its stock from US stock exchanges and global benchmark stock indexes.
At this point, it is unknown if there are any conditions attached to the settlement. That may become clearer in court filings necessary before May 20.
Xiaomi’s share price fell 15% after its blacklisting was announced. The company has insisted all along that it is neither owned nor controlled by the People’s Liberation Army. However, this a rare victory for China’s technology giants caught up in the technology and investment contestation between Washington and Beijing.
That shows few signs of easing up under the Biden administration. It has just extended its predecessor’s 2019 executive order intended to exclude telecommunications equipment from US networks made by firms assessed to pose a national security risk to the United States — for which read Huawei and other Chinese firms.