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U.S. judge temporarily lifts Xiaomi ban, Xiaomi responds

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Back in January, the United States made a huge move in blacklisting Xiaomi from the national investment scene, forcing U.S. investors owning holdings in Xiaomi to divest themselves by November, and prohibiting any further investments. The ban came as a sudden shock after Huawei’s famous fall from grace happened in 2019—especially after it was quickly discovered that Xiaomi’s blacklisting was based on similar suspicions of the firm working in cahoots with the Chinese government. 

The accusation was based on a state service award received by the mobile manufacturer’s CEO in 2019, called “Outstanding Builder of Socialism with Chinese Characteristics” and featured on Xiaomi’s website. Without preliminary injunctive relief, the U.S. investment ban for Xiaomi was set to go into effect today (March 15) at 9:30 am.

On March 12, however—just a few days before the enforcement—U.S. District Judge Rudolph Contreras put a temporary hold on the Xiaomi investment ban imposed by the Trump administration, ruling that the Defense and Treasury Departments “have not made the case that the national security interests at stake here are compelling.” He further removed them from the CCMC list of “Communist Chinese Military Companies” after Xiaomi filed a lawsuit against the U.S, claiming reputational and economic losses from being falsely categorized as a military company. After Contrera’s decision was made public, the firm’s shares jumped 12%, after having lost over 40% since the blacklist in January. 

Xiaomi, which has been vehemently denying any allegations of espionage or ties to the Chinese military, responded to Judge Contreras’ ruling with a statement on Sunday.

Xiaomi is pleased to see that on March 12, EST, the court enjoined DOD from implementing or enforcing the designation of Xiaomi as a CCMC. Pursuant to the injunctive relief granted, the Court removed, in full and with immediate effect, the Executive Order 13959 restriction on U.S. persons to purchase Xiaomi’s securities and the requirement on U.S. persons to divest their holdings. 

Xiaomi reiterates that it is a widely held, publicly traded, independently managed corporation that offers consumer electronics products solely for civilian and commercial use. 

Xiaomi believes that the decisions of designating it as a Chinese Communist Military Company are arbitrary and capricious, and the judge agrees with it. Xiaomi plans to continue to request that the court declare the designation unlawful and to permanently remove the designation.

Xiaomi is a young and energetic technology company. Over the years, we have offered amazing consumer electronics products such as smartphones and smart TVs with honest prices to consumers all over the world. We are committed to working with our global partners to let everyone in the world enjoy a better life through innovative technology.

The court order says restrictions placed on Xiaomi within the U.S. are to be lifted in full, granting the give the company “leave to file supplemental declaration.” There is no current time limit set on the temporary ban lift, but for now, traders within the United States are free to invest and maintain possession of their holdings in Xiaomi. 

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