Xiaomi sues in US court to overturn Donald Trump’s ban on investing in world’s third-largest smartphone maker

Xiaomi sued in the US District Court of Columbia, naming the Biden administration’s Defence Secretary Lloyd Austin and Treasury Secretary Janet Yellen as defendants

The US Department of Defence designation of Xiaomi’s affiliation with the People’s Liberation Army is ‘unconstitutional’ as ‘it deprives Xiaomi of its liberty and property rights without due process of law’, according to the firm’s filing

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A Mi 5G smartphone by Xiaomi Corp on display inside the AliExpress plaza retail store, operated by Alibaba Group Holding, in Barcelona on January 13, 2020. Photo: Bloomberg

Published: 11:45am, 30 Jan 2021Updated: 10:57pm, 30 Jan 2021

Xiaomi Corp, the world’s third-largest smartphone vendor, has sued the defence and treasury departments of the United States, seeking to undo the former Trump administration’s ban that prohibits US investors from owning the company’s shares.

The US Department of Defence (DOD) designation of Xiaomi’s affiliation with the People’s Liberation Army (PLA) of China is “unconstitutional” as “it deprives Xiaomi of its liberty and property rights without due process of law,” according to the Beijing-based company’s filing in the US District Court of Columbia.

“Xiaomi faces imminent, severe, and irreparable harm if the Designation remains in place and the restrictions take effect,” the company said in its filing, which named as defendants Defence Secretary Lloyd Austin and Treasury Secretary Janet Yellen, both appointees of President Joe Biden’s administration.

Xiaomi was among dozens of Chinese technology companies placed under sanctions and black lists by Trump, whose tumultuous four-year tenure caused US-China relations to deteriorate to the worst level in decades. Tension between the world’s two largest economies spilled over from their trade war into conflicts over technology, human rights, currency and even the origin of the coronavirus pandemic.

Source: Canalys Smartphone Analysis. SCMP Graphics

The former administration has already put Chinese telecommunications equipment giant Huawei Technologies Co, chip maker Semiconductor Manufacturing International Corporation and drone manufacturer DJI on sanction lists that barred them from using US hi-tech hardware and software. The shares of China Telecom, China Mobile and China Unicom were excluded from US portfolios for their alleged ties to the PLA, denied by all three state-owned Chinese telecoms network operators.

“Xiaomi is not owned or controlled or otherwise affiliated with the Chinese government or military, nor is it owned or controlled by any entity affiliated with the Chinese defence industrial base,” the Hong Kong-listed technology company said.

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