The Chinese company has been removed from the government blacklist after a legal battle which ended in a settlement
Back in November 2020, then-president Donald Trump signed an executive order barring American securities and investment companies from doing business with “Communist Chinese military companies”. This blacklist included a raft of major Chinese businesses, including China Mobile, China Telecom, Huawei, and Xiaomi.
Many of these companies, including smartphone maker Xiaomi, quickly engaged the US government in a legal battle in order to preserve their right to receive US investment. By January 2021, Xiaomi had secured a preliminary injunction, effectively allowing them to ignore the blacklisting until the court case was resolved.
Now, four months later, it seems that Xiaomi will be removed from the blacklist altogether, after the company and the US Defense Department reached an in-court settlement. According to a Bloomberg report, the two parties agreed “upon a path forward that would resolve this litigation without the need for a contested briefing”.
The news has seen Xiaomi shares boosted significantly, up nearly 5%.
While this is undoubtedly great news for Xiaomi itself, it remains to be seen how much this settlement represents a new, softer approach to the Chinese companies previously sanctioned by Donald Trump.
Huawei, of course, is the company that has been struck the hardest by US sanctions over the past 18 months, seeing major losses as a result, especially in the smartphone sector.
However, new president Joe Biden has shown little sign of relenting on the Chinese companies since his inauguration in late January, instead hoping to cement himself as similarly ‘tough on China’.
In fact, earlier this week it was announced that the New York Stock Exchange is still set to delist China Mobile, China Unicom, and China Telecom, despite various protests. The delistings come as a result of investment restrictions put in place by ex-president Donald Trump, which president Biden has shown no signs of repealing.
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