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Xiaomi US ban blocked in court - could Huawei be next?

Xiaomi Mi 10 Lite 5G
(Image credit: Xiaomi)

A United States federal court has halted a ban issued by the Trump administration that blocked investment in Chinese mobile giant Xiaomi.

US District Judge Rudolph Contreras sided with Xiaomi in her decision, which came after the Chinese firm said the investment ban  was "unlawful and unconstitutional" and would cause it "irreparable harm".

Contreras stated that the original decision was “arbitrary and capricious", and hinted that Xiaomi could stand to win a full reversal of the ban as the litigation unfolds.

Reversal

Xiaomi's complaint came after it was added to the US blacklist of companies suspected of having ties to the ruling Chinese Communist Party by the Trump administration back in January.

This blocked any US individuals or companies from investing in Xiaomi, which counts technology backers such as Qualcomm alongside financial giants including Vanguard Group and BlackRock as existing investors. 

In a statement, Xiaomi said that it is a “young and energetic tech company” that is publicly traded and independently operated. 

Xiaomi, which recently pipped Apple to become the third-largest smartphone maker in the world, saw its shares climb over 10% in the Hong Kong exchange following the news.

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Xiaomi is not the only company that has faced the brunt of former President Trump’s banning spree. Huawei and ZTE were also placed on the blacklist, alongside Chinese mobile applications WeChat and TikTok, citing threats to national security.

Xiaomi has been the only company to overcome sanctions so far, with Huawei facing additional limitsfrom the Biden administration that further restrict US companies from supplying components for its 5G devices.

Biden’s presidential election victory had increased hopes of a reprieve, but comments from his nominee for Commerce secretary earlier this year suggested there would be no change in policy.