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Chinese phone-maker Xiaomi sues US government over investment ban

Donald Trump placed Xiaomi on a blacklist over suspected ties to the Chinese military in January. Now Xiaomi is fighting back.


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) -- meaning they're believed to have ties to the Chinese military, under the National Defense Authorization Act of 1999. CCMC-designated firms are prohibited from receiving stock or securities investments from US citizens or organisations.

In response, Xiaomi filed a lawsuit over the weekend against US government officials 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.'"


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

Xiaomi is one of the world's largest smartphone manufacturers and the latest major Chinese technology company to enter a legal fight with the United States. The blacklist restrictions have dealt a blow to the Beijing-based company, which says it'll cause "immediate" and "irreparable harm" by cutting off Xiaomi's access to US capital markets and limiting its ability for business expansion.

Xiaomi has benefited from the Trump administration's pressure campaign against Chinese rival Huawei. This has resulted in, among other things, a drastic reduction of Huawei's phone sales outside its native China since its devices lost access to crucial American technology including Google's apps and services. In the third quarter of last year, for instance, Xiaomi surpassed Apple to become the world's No. 3 phone-maker in terms of units sold, according to IDC research.

Trump's tough stance on China, and Chinese companies, has been a hallmark of his presidency. Along with levelling trade sanctions on Huawei, 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.