The outgoing Trump administration has continued its aggressive campaign against Chinese tech companies in the US with the blacklisting of Xiaomi.
Xiaomi is the third-largest phone manufacturer in the world, and has a range of TV products under the Mi sub-brand including an Android TV streaming stick which launched in 2020.
Now, with less than a week left in its term, the administration has instructed the Department of Defense to designate Xiaomi as a “Chinese Communist military company,” in accordance with the statutory requirement of Section 1237 of the National Defense Authorization Act for Fiscal Year 1999.
This means that the company is vulnerable to the executive order banning the US from investing, a fate which has befallen Huawei and similar to one that was temporarily faced by TikTok.
Reuters reports that American investors will be forced to divest their holdings of the 35 blacklisted companies covered by the ruling. The other companies listed as being owned or controlled by the Chinese military include chipmaker SMIC and oil firm CNOOC.
The list is separate to the US Commerce Department’s Entity List which prevents US companies from exporting tech to blacklisted firms. Huawei and SMIC are on both lists, but Xiaomi is, at present, only covered under the DoD ruling.
Xiaomi has refuted the decision, and issued a statement that it is “operating in compliance with the relevant laws and regulations of jurisdictions where it conducts its businesses.” The company said that it was reviewing the consequences of the decision before launching a challenge.
It is likely that the Biden administration will wheel back on the nationalistic anti-China rhetoric spun by Trump as a political point, and the incoming president may overturn this order before it is implemented.
The timing of the ban comes days after Donald Trump became the first US president in history to be impeached twice and amid major political unrest in the country.
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