Before leaving office, President Trump has placed Xiaomi under a new blacklist according to a report by Reuters. Xiaomi along with nine other companies have been placed on an investment blacklist by Trump and is alleged to be part of the "Communist Chinese military.” American investors are being told to refrain from investing in the company for the time being. 

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It’s unclear as to why Xiaomi has been put into a blacklist however the U.S. Government is making America Investors to divest their holding and have until November 11th to do so. It’s not known how this will affect Xiaomi however major companies like Qualcomm have invested in the company. 

“The Department is determined to highlight and counter the People’s Republic of China’s (PRC) Military-Civil Fusion development strategy, which supports the modernization goals of the People’s Liberation Army (PLA) by ensuring its access to advanced technologies and expertise acquired and developed by even those PRC companies, universities, and research programs that appear to be civilian entities,” the US Department of Defense statement reads about including Xiaomi in the blacklist. 

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The move comes after President Trump’s back and forth clampdown on Chinese companies who have been suspected of working with the Chinese Communist Party (CCP). Huawei was the first victim and was placed on its entity list which prevents U.S. based companies from doing business with the Chinese smartphone giant. Having said that, Xiaomi has not been put on the entity list as of now which means suppliers based in the U.S. can still do business with the Chinese company for now.

However, this move does put Xiaomi in a dire position and could see Xiaomi see its business further targeted in the future. President-elect Biden’s administration could overturn the decision however when it comes to national security concerns, most presidents tend not to bend the other way

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Xiaomi was blacked under Section 1237 of the National Defense Authorization Act. The executive order by President Trump mentions China's national security strategy where it forces companies to support and cooperate with the military. The order also claims that China exploits US investors by allowing companies like Xiaomi to get funds from American investors and exploits them. Not much was added on how Chinese companies exploit American investors however it seems this order is here to stay for a while.

We can only know more about Xiaomi’s fate after the presidential transition takes place in about a week’s time and whether President-elect Biden might overturn Trump’s executive order or not. 

Source: Reuters

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