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Xiaomi Sues US. Over Inclusion in Blacklist

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Xiaomi, a Chinese electronics company, has sued the United States government over former President Trump’s decision to include it on an official blacklist of companies.

On January 15, the Trump administration included Xiaomi along with eight other Chinese companies, such as Huawei and DJI, that have alleged connections to the Chinese military. Xiaomi calls this decision “unlawful and unconstitutional” and additionally adds that Xiaomi “is not owned or controlled by, or otherwise affiliated with the Chinese government or military, or owned or controlled by any entity affiliated with the Chinese defense industrial base. Nor does the Chinese government or military, or any entity affiliated with the defense industrial base, possess the ability to exert control over the management or affairs of the company.”

The Xiaomi Corporation filed their complaint to the US Defence and Treasury Departments which was later addressed to Llyod Austin and Janet Yellen, Biden appointees. The complaint states that Xiaomi’s co-founders, Lin Bin and Lei Jun, hold 75% of the company’s voting rights under a weighted structure. In their lawsuit, they added how it would cause “immediate and irreparable harm to Xiaomi” as they have a “substantial number” of US residential shareholders.

Although the investment restrictions are designated to come into effect on March 15, it has already impacted its net income. As Xiaomi is ranked second, behind Apple and Samsung (according to the latest figures from Canalys), and has a large global footprint, the potential ban could severely hamper the company’s growth. After Xiaomi was added to the blacklist, the company's stocks dropped to more than 14% (Business Insider). The fourth-quarter sales of Huawei, another Chinese electronics company that has been placed on the blacklist, additionally dropped by more than 40% (Business Insider).

In order for the administration to have enough time to review the policy, Biden has postponed the date for the investment ban from January 28 to May 27. Although the administration has not shown any signs of softening the US’s approach to dealing with all of these Chinese electronics companies, Antony Blinken and Mike Pompeo, Biden’s secretary of state and his predecessor, both agreed with the assessment that China has been executing genocide against Uighur Muslims, a Turkish ethnic group.



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