Xiaomi Removed From the US List of Boycotted Chinese Companies

Sophie Webster, Tech Times 18 July 2021, 11:07 am

Xiaomi will be removed from the list of boycotted Chinese companies in the United States, according to a released court filing in May.

The U.S. Defense Department was ordered to exempt Xiaomi, a Chinese phone maker, from the companies that American consumers are encouraged to boycott.

The said list of companies have alleged links to the Chinese military, and the Chinese smartphone company was added to the list in January, though a U.S. federal judge temporarily blocked the order in March.

Xiaomi Gets Taken Off Boycott List

All companies included on the Defense Department's list are prevented from receiving investments from U.S. citizens and organizations.

If the company's designation had not been overturned, all existing investors in the United States would have had to divest.

When the removal from the list was announced, the shares of the smartphone company increased 6.1% in Hong Kong, according to The Wall Street Journal.

Also Read: Xiaomi Faces Smartphone Sales Ban in India. Here's Why

Xiaomi is one of the biggest smartphone makers in the world, together with Huawei, Apple, and Samsung in terms of market share, according to IDC.

Huawei, another Chinese smartphone company, was accused by the U.S. government of being tied to China's communist government and deemed as a threat to national security. However, no evidence was released to support the claim.

Huawei is on the list of the Department of Commerce, and it is forbidden to trade with U.S. companies. Huawei has long denied any wrongdoings, and the company continues to maintain its innocence on the matter, according to CNET.

Xiaomi Files Legal Complaint

Before Xiaomi was removed from the U.S. list of boycotted Chinese companies, the company filed a complaint last year. The U.S. government were asked to cite the reasons behind the ban.

Aside from accusing the company of being affiliated with the Chinese military, one of the reasons cited by the U.S. Department of Defense is that the company's investment plans in technologies such as artificial intelligence and 5G are too ambitious, as the company plans to invest $7.7 billion over the next five years.

The reasons cited were deemed unfair by the company, leading to the filing of an official complaint in the U.S. District Court for the District of Columbia.

The complaint was addressed to the Department of Defense and the Department of the Treasury, which underwent leadership changes when the government transitioned from former President Trump to President Biden in January.

The Chinese smartphone maker claims that the Department of Defense was incorrect and had intentionally deprived them of due process.

Xiaomi Wins Court Ruling

After months of court hearings, the company won the case. U.S. District Judge Rudolph Contreras was the one who placed a temporary halt on the ban to prevent the company from suffering further.

According to Bloomberg, Xiaomi may also request the court to declare any connection of the company to the Chinese military as unlawful and permanently remove its designation on the Communist Chinese military companies list.

Judge Contreras stated that the court is skeptical that Xiaomi imposes any serious threats to national security.

Both the U.S. Department of Defense and Xiaomi have yet to release any official statement regarding the overturn of the ban.