A judge in the US has ruled that the current sanctions against Xiaomi are unlawful. Donald Trump had blacklisted the smartphone maker just before he left the White House.
Xiaomi was put on the so-called Communist Chinese Military Companies (CCMC) list. US citizens are not allowed to trade with or invest in any company on that list. Former US President Donald Trump added Xiaomi to that list in the last days of his presidency.
Judge Rudolph Contreras, however, finds this measure disproportionate. He does not see sufficient justification for this placement and says he is sceptical about the security interests implied by the Trump administration. He also has doubts about the wording of the memorandum on the listing. According to Contreras, it gives the impression that Xiaomi has been placed on the list rather haphazardly.
On the other hand, Xiaomi is currently suffering greatly from the sanctions. The value of the company’s shares has fallen by 9.5 percent, and several American banks have suspended trading in the shares. The company is also losing more and more contracts worldwide. Contreras describes all this as ‘irreparable damage’.
“Taken together, the Court concludes that Defendants have not made the case that the national security interests at stake here are compelling,” Contreras writes. With this decision, Xiaomi has been provisionally suspended from the CCMC list. However, this suspension is not yet definitive.
Reason for listing unclear
The US government has not provided a thorough explanation of what the sanctions against Xiaomi are based on. The company focuses entirely on the consumer market. With the sanctions in place, Xiaomi could still sell phones and other equipment to American consumers. Only business dealings with Xiaomi were blocked.
Xiaomi says it is pleased with the outcome but vows to continue the fight until it is permanently removed from the list. Other companies on the CCMC list are Huawei, Hikvision, Inspur, Panda Electronics and Semiconductor Manufacturing International Corporation (SMIC).