A federal judge has blocked enforcement of the U.S. investment ban on Xiaomi Corp., calling the decision to blacklist the Chinese technology giant “deeply flawed.”
Ordering a temporary halt to the ban in a decision late Friday, Judge Rudolph Contreras cast doubt on the Pentagon’s decision in January to designate Xiaomi XIACY, -0.27% 1810, +4.12% as a company with links to the Chinese military. Judge Contreras said the U.S. failed to convincingly show such links in prior filings with the court.
“Xiaomi is a publicly traded company that produces commercial products for civilian use, is controlled by its independent board and controlling shareholders, and is not effectively controlled or associated with others under the ownership or control of the PRC or its security services,” the judge said in the opinion, using the abbreviation for the People’s Republic of China.
Xiaomi said it was pleased with the judge’s ruling and said it would seek permanent removal of the investment ban. The Pentagon didn’t immediately respond to a request for comment.
The decision marks a victory for Xiaomi following its addition, in the waning days of the Trump administration, to the U.S. Defense Department’s list of companies it believed was linked to China’s military.
The decision blocked Americans from investing in the company, the world’s third-largest seller of smartphones. The designation took many company observers by surprise, given the company’s heavy focus on consumer electronics. The company, which denies any military links, filed a lawsuit in the U.S. District Court in Washington, D.C., seeking to overturn the designation.
The decision is another courtroom setback in the Trump administration’s campaign against China’s technology sector. Last year, two federal judges issued temporary halts to a ban on U.S. downloads of the Chinese social-media app TikTok, saying the U.S. overstepped its authority.
Add Comment