US government action against Xiaomi suspended
Posted On March 13, 2021
The Chinese smartphone provider Xiaomi has won a stage victory in the fight against US sanctions still imposed by the Donald Trump administration. A judge in Washington suspended the punitive measures, according to court documents released over the weekend. This includes the ban on American investors from buying Xiaomi shares, which should take effect next week. They should also part with shares already held by January 2022.
However, the judge granted Xiaomi’s request for an injunction against the sanctions. The US Department of Defense did not adequately justify it and exceeded its powers, he wrote to justify. In an embarrassing mishap, the legal provision on which the procedure is based was also incorrectly quoted. “These mistakes do not create confidence in the thoroughness of the decision-making process,” he said.
The Ministry of Defense had blacklisted Xiaomi shortly before the end of the term of office of ex-President Donald Trump on allegations of links to the Chinese military. Xiaomi denies the allegations.
The administration of the new US President Joe Biden can reverse the sanctions. It has already suspended the action taken by Trump against Chinese services such as the WeChat chat service and the Tiktok video app for further review.
Trump had portrayed China as the greatest international threat to the US over the years and, among other things, claimed in the election campaign without any evidence that Biden had been bought by Beijing. Trump’s government intensified a trade conflict with China and also took action against various Chinese companies. The hardest hit was Huawei. The network supplier and smartphone provider lost access to American technology – because of the allegation that the Chinese government could force it to cooperate far-reaching. Huawei rejects this. Xiaomi benefited from Huawei’s problems in the smartphone business.
Xiaomi grew up selling cheap but technically sophisticated smartphones on the Internet. The company now has all sorts of devices on offer, from televisions to rice cookers.