Xiaomi: Off the blacklist! What now?
Joe Perry May 12, 2021 9:03 PM
After a 6% move higher on Wednesday, the technology giant is bumping up against resistance Share:
Earlier this week,
Chinese smartphone marker Xiaomi Corp. was finally removed from the “Blacklist” which restricted Americans from investing in the company. It was placed on the list by the Trump Administration in January after being labeled a Communist Chinese Military Company. In March, a US Federal Judge placed a temporary halt on the US investment ban, noting that the US government’s process for determining that the firm was tied to the Chinese military was “deeply flawed”.
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Xiaomi and US government squash their beef
Xiaomi was labeled a national security threat in the United States during the waning days of the Trump administration, following similar action against Huawei and ZTE. The company filed a lawsuit against the US government in order to prevent the ban, and today, both parties have reached a settlement that will remove the technology giant from being blacklisted altogether.
Though it was never added to the entity list, the move blocked Xiaomi from acquiring goods and services from US vendors and required American investors to divest their stakes in the company. Under today s arrangement, both Xiaomi and the Department of Defense have agreed to vacate its designation as a Communist Chinese Military Company, with a final joint proposal to end the order expected to be filed before May 20th. This action follows an injunction set back in March, which blocked US restrictions on Xiaomi after a US District Judge referred to the designation as ar
Judicial Checks on Abuse of the National Security Rationale: The Case of Xiaomi SHARE
During the Trump administration, national security rose in prominence as a reason for restricting trade, investment and other economic activity. Among other examples, purported national security concerns led to the imposition of steel and aluminum tariffs under Section 232 of the Trade Expansion Act of 1962 (as our colleagues Scott Lincicome and Inu Manak describe here); there were bans on Chinese social media apps WeChat and TikTok; and most recently, the shares of certain Chinese companies, including electronics maker Xiaomi, were prohibited from being traded by Americans.
There are, of course, some legitimate security concerns relating to China specifically and to the world more broadly. However, when U.S. courts have been asked to review the actions of the Trump administration that were supposedly based on national security considerations, they have often rejected the justifications be