U.S. Blacklists Xiaomi of Chinese companies that pose a national threat



Donald Trump's administration is not over yet, nor does his administration's actions. Following the veto of Chinese companies, he now blacklists Xiaomi for alleged ties to the Chinese army.

I'm sure Huawei and the U.S. blockade will come to mind. However, Xiaomi is a different case, as explained below.

Xiaomi on the US blacklist

As with Chinese companies that have been restricted in recent years, the U.S. government believes Xiaomi could be a threat. But in this case, Xiaomi becomes part of a list managed by the Department of Defense as it is considered a threat to national security, and not on the Department of Commerce's list as it did with Huawei.

As they mention in their statement, they believe Xiaomi is related to the Chinese army, and mention it among "communist Chinese military companies", with all the danger it could pose to the U.S. government.

DOD Releases List of Additional Companies, In Accordance with Section 1237 of FY99 NDAA > U.S. DEPARTMENT OF DEFENSE > Release

Unlike Huawei, which the United States implemented a total veto concerning commercially linked U.S. companies, Xiaomi would not have this consequence, but it does leave it in a very vulnerable situation about any action taken by the government.



For example, one of the prohibitions that would apply would force U.S. investors to withdraw financial support to Xiaomi, within a maximum period of November 11, 2021. So US-based investment firms have been able to do so. The U.S. will have to sell their stake during this time span, which can cause a collapse in the share price.

Perhaps you could speculate that Joe Biden's government can represent a hope for Xiaomi and the rest of the vetted companies, but if there is a slight chance, that will look very long-term.

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