Joe Biden administration removes Xiaomi from US blacklist
The US Department of Defense has agreed to remove Chinese tech conglomerate Xiaomi from a Donald Trump-issued blacklist that labelled it a "Communist Chinese military company". Trump's original decision was designed to prevent American companies from investing in Xiaomi by alleging it had Chinese military ties. However, the Joe Biden administration's reversal heralds efforts to resolve ongoing litigation between Xiaomi and the US government.
Biden reversal could embolden other blacklisted firms to follow suit
Xiaomi did not take the Trump blacklist lying down. It had sued the US government while calling the blacklist "unlawful and unconstitutional" and denying ties to Chinese military. The move has emboldened other blacklisted Chinese firms to consider similar lawsuits against the US government. Occurring two months after Xiaomi's lawsuit, the Biden reversal managed to boost the company's stocks by 6.1 percent.
Biden reprieve spares Xiaomi from meeting Huawei's fate
Xiaomi sells smartphones, laptops, electric scooters, and smart home products. The blacklist had come as a surprise as it claims to sell its products for civilian use only. Its rival Huawei, however, caters to a much wider client base. In 2019, it was put on an export blacklist, barring it from accessing US technology which impaired its ability to design chips and source components.
Before Xiaomi, Trump had systematically sanctioned several Chinese entities
Trump had also clamped down on Chinese apps such as Tencent QQ, Vmate, Alipay, WeChat Pay etc., while also barring US firms form investing or otherwise transacting with their parent companies. He had famously gone after TikTok, which successfully got legal recourse against the ban. Additionally, the US Defense Department had set restrictions on Semiconductor Manufacturing International Corporation (SMIC), China's top chipmaker.
Will Biden's policy shift on China extend to Huawei?
The US government's decision to remove Xiaomi from its blacklist looks like it might be going soft on Chinese companies. What remains to be seen is if Biden will extend Trump's 2019 executive order barring American companies from buying telecommunications equipment made by Huawei and other Chinese companies suspected of posing a national security risk.