xiaomi investment ban

Xiaomi has been removed from a blacklist that would have prevented U.S. companies from investing in the smartphone maker. The company was previously designated as having ties to the Chinese military by the Defense Department under former President Donald Trump.

After Xiaomi was designated as a “Chinese Communist Military Company,” it sued the U.S. government, but a recently filed joint status report with the Defense Department said vacating the Chinese company’s designation “would be appropriate,” according to Bloomberg.

“The Parties have agreed upon a path forward that would resolve this litigation without the need for contest briefing,” the filing said. Xiaomi and the Defense Department are expected to negotiate over specific terms before filing a joint proposed order by May 20.

Xiaomi previously refuted claims that it’s affiliated with the Chinese military, and an earlier injunction against the Trump-era order said the company would suffer irreparable harm should it be placed on the blacklist. If it were to remain on the blacklist, American investors may have been forced to divest their holdings. The company would have also been de-listed from U.S. exchanges. Meanwhile, companies using hardware or software developed primarily in the U.S. would be subject to a trade ban with Xiaomi.

Huawei was previously placed on an Entity List, crippling its ability to sell Android-based smartphones internationally. Bloomberg points out that the Biden administration this week extended “a 2019 executive order barring U.S. companies from using telecommunications equipment made by firms like Huawei that it accuses of posing a national security risk.”

Qualcomm Ventures has been a major investor in Xiaomi, but the company reportedly divested its holdings in the company last year. While Xiaomi is no longer blacklisted, a spokeswoman for the White House National Security Council said it’s still “deeply concerned” with potential U.S. investments linked to the Chinese military.

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