A US judge has temporarily removed Chinese smartphone giant Xiaomi from a Trump-era blacklist prohibiting American investment in “Communist Chinese military companies.”
The ruling was announced by US District Judge Rudolph Contreras in Washington on Friday. The judge argued that the US Departments of Defense and Treasury “have not made the case that the national security interests at stake here are compelling,” issuing a preliminary injunction removing Xiaomi from the blacklist.
Xiaomi was hit with the ban as then-President Donald Trump took a fresh series of hostile moves against China during his last days in office. The smartphone maker and several other China-based businesses have been classified as “Communist Chinese military companies” by the Pentagon and barred from receiving American investment.
The company challenged the ban in the US courts this January, arguing that the Trump administration’s actions were “incorrect” and “deprived the company of legal due process” altogether. Hailing the temporary lift of the ban, the company vowed to continue its legal battle to have the Pentagon’s designation overturned completely.
“Xiaomi believes that the decision of designating it as a ‘Chinese Communist Military Company’ is arbitrary and capricious, and the judge agrees with it,” a spokesperson for Xiaomi told Chinese media in a statement on Saturday.
Xiaomi plans to continue to request that the court declare the designation unlawful, and permanently remove the designation.
The court ruling came on the same day US regulators took a new hostile stance against several Chinese companies, including telecom giants Huawei and ZTE. The Federal Communications Commission (FCC) said the companies pose “an unacceptable risk to US national security or the security and safety of US persons.”
While it was not immediately clear what restrictions might stem from the designation, the move left yet another dent on the hopes of a possible rapprochement between China and the US under President Joe Biden. Earlier this week, Washington reportedly imposed new restrictions on Huawei, banning US firms from supplying the Chinese giant with any products that can be used in 5G devices.
The decision – in line with the hardline policies of the previous US administration, which waged a bitter trade war with Beijing for months – has already provoked an angry response from China.
“Facts have repeatedly shown that the United States is an unreliable and uncredible country. This practice not only harms the legitimate rights and interests of Chinese companies, but also harms the interests of companies in the US,” China’s Foreign Ministry spokesman Zhao Lijian said during a press briefing on Friday.
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