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Xiaomi sues US Government to reverse investment ban

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Days after the Trump administration blacklisted Xiaomi and designated it as a “Communist Chinese military company”, thereby imposing an investment ban on the Chinese smartphone and consumer electronics giant, the company has hit back. Xiaomi has sued the US Government and is now asking for the ban to be reversed.

As you might recall, it was just a few days ago that the outgoing Trump administration added Xiaomi to a list of companies that are barred from accepting investments from American companies and individuals. While this ‘investment ban’ did not affect Xiaomi’s business as much as the ban on Huawei, it did mean a major financial hit for the company. American investors were given time until November 2021 to ‘withdraw’ their investments in Xiaomi.

However, with a new administration taking over, Xiaomi seems hopeful that the order issued by the previous administration’s is repealed. The company has also taken legal recourse and has now sued the US Government and asserts that the outgoing administrations’ assertions are untrue. 

Xiaomi has filed a lawsuit with the U.S district court of Columbia that challenges the blacklist and has termed the blacklisting “unconstitutional”. The lawsuit also names Defense Secretary Lloyd Austin and Treasury Secretary Janet Yellen as defendants.

Xiaomi adds that once the restrictions go into effect on March 15, 2021, it will cause “immediate and irreparable harm to Xiaomi, and will effectively snap Xiaomi’s access to U.S. capital markets”, This, according to the company, will interfere with their business relationships and affect their ability to conduct and expand its business.

The company also made a voluntary announcement about the litigation where it states that the decision to include the Xiaomi as a “Communist Chinese Military Company” was factually incorrect and that the lawsuit is its way of protecting the interests of its users, partners, employees and shareholders.

It will be interesting to see if the court does grant some relief to Xiaomi. What also remains to be seen is if the new Biden administration works to rectify the situation. As of now, though, the decision to sue the US Government will only elevate the tensions between the US and China.

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Rahul Srinivas

Rahul Srinivas
Senior Editor

Among the most experienced tech journalists from India, Rahul has spent the better part of the past decade writing and experiencing technology. In his decade-long career, Rahul has contributed to several Indian and International publications, including Mobilegeeks, Onlygizmos, iPhoneHacks, and The Inquisitr. Before joining NextPit, he held the position of Senior Editor at MySmartPrice - one of India's largest product research platforms.

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  • 49
    storm Feb 1, 2021 Link to comment

    Because of how China's economy operates, i don't think Xiaomi can substantively confirm their independence. What seems more interesting is how Biden will position his administration in regards to this appeal.

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