US Removes Xiaomi From Blacklist, Reversing Trump’s Decision; Shares Jump 6%
The Biden administration has reversed a ban on Xiaomi placed by Trump’s office which prohibited US investment in the Chinese company.
Trump had blacklisted Xiaomi claiming that it is linked to the Chinese military.
The move was part of Trump’s anti-China rhetoric which, among other factors, propelled him to success in the 2016 US elections.
Xiaomi Sues US Govt
Xiaomi has denied the accusations and sued the US govt in January, making a case for the ban being “unlawful and unconstitutional”.
It stated that it has always been compliant with the laws and regulations when it comes to conducting business.
It reaffirmed that its products and services are for civilian and commercial use.
It denied Trump’s allegations by saying that it is not owned, controlled or affiliated with the Chinese military.
It is instead controlled and managed by an independent board and shareholders.
Ruling In Xiaomi’s Favor
The ruling sided in its favor in March with the judge citing the “deeply flawed” process and insufficient legal basis behind the ban.
The US court proceeded to direct the govt to suspend the ban.
In the same session, Luokung Technology Corp, a Chinese company dealing in mapping technology was also granted reprieve.
Both parties have now reached an agreement wherein Xiaomi will be reinstated. A joint proposal will be filed before May 20.
Other Chinese Apps Under US Radar
However, Huawei, which was also part of the ban on a list of Chinese companies, remains at a loss as it has lost access to components required for its smartphone division which are made in the US.
Trump had also gone on the offensive against TikTok and WeChat, two globally and immensely popular Chinese-developed apps.
However, the bans on these two were temporarily lifted by 2 federal judges last year, citing an overstepping of authority on the part of the US government.
The Hong Kong share market responded positively to the Xiaomi news with Xiaomi shares going up by 6.7%.
This is a recovery from the fall of 20% in share price experienced in January when the ban was placed.
Xiaomi will now be able to access the US smartphone market after its resounding success in China and especially India where it enjoys the position of market leader.