Court blocks US govt from imposing restrictions on Xiaomi

During the final days of Trump’s administration, the US Defence Department had placed Xiaomi on a blacklist which imposes financial restrictions onto the smartphone maker. After Xiaomi had filed a lawsuit, a federal judge has placed a temporary halt to the ban.

According to US District Judge Rudolph Contreras, the move was “arbitrary and capricious” and deprived the company of its due process rights. He added that Xiaomi was likely to win a full reversal of the ban as the litigation unfolds and issued an initial injunction to prevent the company from suffering “irreparable harm”.

Unlike the blacklist that’s imposed on Huawei, Xiaomi isn’t prohibited from dealing with US companies and it can still continue to manufacture smartphones with Google apps and services pre-installed. However, the restrictions would force US investors to sell their Xiaomi stocks by 11 November and Xiaomi would face possible delisting from US exchanges.

While this is good news for Xiaomi, the smartphone maker plans to push the US courts to declare its labeling of being a “Chinese Communist Military Company” as unlawful. Besides Xiaomi, the US government has also imposed a wide range of restrictions on Chinese tech companies including WeChat and TikTok, citing threats to national security. The same judge also brushed the concerns saying that it is somewhat skeptical that weighty national security interests are actually implicated here.

It was believed that the blacklist on Xiaomi was imposed after Xiaomi’s founder and CEO, Lei Jun, was awarded the “Outstanding Builder of Socialism with Chinese Characteristics” in 2019 from China’s Ministry of Industry and Information Technology. It is speculated that the award was the reason why Xiaomi was added to a list of companies that supported China’s military.

[ SOURCE ]

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