What just happened? Xiaomi is suing the U.s. regime after Donald Trump'due south administration designated the firm a 'Communist Chinese military visitor' and placed it on a blacklist that could strength US investors to divest. The smartphone giant was one of nine Chinese companies added to the Pentagon blacklist on Jan fifteen, merely days before Joe Biden's inauguration.

A 1999 constabulary requires the Defence Section to compile a itemize of companies owned or controlled by the People's Liberation Army. The Pentagon has added 35 names so far, including chipmaker SMIC and Huawei.

Companies placed on the list are subject to an executive society from Nov 2022 that prohibits Americans from trading or investing in the firms. Information technology also orders Americans with holdings to sell their stakes inside one year.

On Friday, Xiaomi responded by filing a lawsuit against the United states of america treasury and defense departments in the district court of Columbia. Information technology claims that the designation is "unconstitutional because it deprives Xiaomi of its freedom and property rights without due process of law." As such, it violates the United states Constitution's Fifth Amendment. Xiaomi as well claims the investment ban will inflict "irreparable harm" on the visitor.

"By cutting off Xiaomi from The states capital markets, the Designation and related restrictions will damage the company'due south ability to deport, grow and finance its business, sell its products, maintain and grow its business relationships, and recruit and retain employees," reads the lawsuit. The business firm's stock has fallen by up to 14 per centum since beingness added to the list.

Xiaomi has repeatedly denied whatsoever association with the Chinese authorities or armed forces. "The company confirms that it is not owned, controlled, or affiliated with the Chinese war machine, and is non a 'Communist Chinese armed forces company' defined under the NDAA," it said.

Xiaomi had the third-highest number of smartphone shipments in Q4 (43.iii million). Information technology besides saw the largest year-on-year increase (32 per centum). Huawei, which is on the same blacklist and the US Commerce Department'south 'entity list,' saw its YoY phone shipments fall 42.iv percent.