Just weeks after the Donald Trump administration put Xiaomi on a list of companies considered “dangerous,” the Chinese company is suing US authorities. Xiaomi has filed documents challenging the decision, calling it “illegal and unconstitutional.” The reason given at the time for sanctioning the company was “links with the Chinese military”, which Xiaomi calls “unfounded accusations”.
Xiaomi says the accusations of the US authorities have serious effects on its business
Xiaomi has filed a complaint saying that this decision affects the company immediately and can cause irreparable damage. Even the mere suggestion that it could collaborate with the Chinese military could damage the company’s reputation in public and limit future business opportunities with potential partners. Most likely, however, this process will not have the desired effect before the order enters into force, which is due on March 15.
Xiaomi representatives claim that 75% of the voting rights on the board of directors belong to the company’s co-founders, Lin Bin and Lei Jun, and that there are no employees with links in the military or other representatives of organizations that could have . Moreover, some of Xiaomi’s shareholders are even of American origin, such as US investment funds.
Currently, unlike Huawei, Xiaomi does not lose access to contracts with US partners. However, US companies and citizens will no longer be able to invest in Xiaomi, and those who own shares will be forced to sell them to comply with this decision.
There are hopes for a favorable decision in the case of Xiaomi, as it is a consumer electronics company, not having telecom equipment on the market, just like Huawei and ZTE. But it remains to be seen how Joe Biden’s new administration will assess the situation. In the case of Huawei, however, the representatives of the White House said that at the moment there will be no changes on the decisions taken by Trump.