Back in January, the Department of Defense labeled Chinese-owned company Xiaomi as a “Chinese Communist military company”. This meant it would be subject to the executive order from then-President Donald Trump that would prevent U.S entities from investing in the company and others that were labeled as such. But now a federal judge has said this branding is “arbitrary and capricious” and issued a preliminary injunction against that particular order against Xiaomi saying it will cause “irreparable harm” to the company.
The Verge shares that U.S District Judge Rudolph Contreras made his ruling based on the fact that he is “skeptical” about the previous administration’s stance on “civilian Chinese companies” like Xiaomi. The Department of Defense labeled companies like Xiaomi as a CCMC even though there has been no significant proof presented that they are indeed working with the Chinese government and putting the liberty of U.S citizens at stake.
For its part, Xiaomi has continually requested that the CCMC designation that they were put in be removed. If the supposed restrictions were to take effect, they said it would cause “extreme and irreversible damage” to their business. They said that they are continually complying with the relevant laws and regulations in places where they conduct their business. They have also reiterated that they are “not owned, controlled or affiliated” with the Chinese Communist Party or the Chinese military.
This injunction prevents the Department of Defense from implementing the restrictions against Xiaomi which were supposed to take effect by next week. What it doesn’t do though is to remove the CCMC label although Xiaomi has said they will continue to request that label to be permanently removed so they can conduct business as usual in the U.S. If the restrictions were to take effect, U.S companies will be prevented from investing in the Chinese-owned company.
Meanwhile, the other Chinese company that has felt the wrath of the Trump regime is not faring so well under the Biden administration as well. Huawei has reportedly been given new restrictions when it comes to licenses to sell from U.S companies. This may disrupt current contracts that they have amidst the continued trade blacklisting they have experienced on U.S soil.
