Xiaomi sues US government in bid to reverse investment ban

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Chinese phone maker Xiaomi has filed a lawsuit against the US government over Donald Trump’s decision to place it on a blacklist, which blocks Americans from investing into the company over its suspected ties to the Chinese military. 

The former US President, in the final days of his presidency, designated Xiaomi along with at least eight other Chinese firms as Communist Chinese military companies (CCMC), or those believed to have ties to the Chinese military, under the National Defense Authorization Act of 1999. Firms designated as CCMC are banned from receiving stock or securities investments from US citizens or organisations starting March 15th. Xiaomi’s Hong Kong-listed stock plunged more than 10% following its addition to the Washington blacklist.

In response, Xiaomi filed a lawsuit over the weekend against US government officials including Janet Yellen, the Treasury secretary, and Lloyd Austin, the US defense secretary, demanding its removal from the blacklist. Xiaomi also denied in an earlier statement that it has any association with the People’s Liberation Army.

“The Company reiterates that it provides products and services for civilian and commercial use,” a Xiaomi spokesperson told CNET in January. “The Company confirms that it is not owned, controlled or affiliated with the Chinese military, and is not a ‘Communist Chinese Military Company.”

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Beyond smartphones, Xiaomi sells a bevy of smart products ranging from smart laps to air purifiers and scooters.

One of the world’s largest smartphone manufacturers, Xiaomi is the latest major Chinese technology company to enter a legal fight with the United States. It also marks a major blow for the the Beijing-based company, which has benefited from the Trump administration’s pressure campaign against Chinese rival Huawei. In the third quarter of last year, for instance, Xiaomi surpassed Apple to become the world’s number three phone maker in terms of units sold, according to IDC research.

Trump’s tough stance on China, and its companies, has been a hallmark of his presidency. Beyond Huawei and ZTE, Trump has also attempted to ban social media platform TikTok, and last month he signed an executive order that prohibits transactions with eight Chinese-made apps, including WeChat Pay and AliPay. 

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