According to a court filing, The US Department of Defense will remove China’s Xiaomi from the government’s blacklist. The former President of the United States, Donald Trump, issued an order designating Xiaomi as a Communist Chinese Military Company.
This step would have forced the Chinese electronics giants to be delisted from U.S. exchanges and other global benchmark indexes. Under his rule, many Chinese firms struggled to operate in the country. Huawei is still under huge constraints which have affected their business majorly.
However, this could be great news for Xiaomi whose products are gaining a lot of attraction worldwide. The blacklisting could have restricted American investment in the company. The court filing further added, “The Parties have agreed upon a path forward that would resolve this litigation without the need for contested briefing.” The parties involved are negotiating over specific terms and will file a separate joint proposal before May 20.
This update was welcomed positively by the investors of Xiaomi. The stock surged by more than 6% intraday in Hong Kong. Since the order was filed by Donald Trump, the stock reported a fall of 15% in its share price. All this while, the company has maintained their stance that they are not owned or controlled by the Chinese military.
Two months back a temporary halt on the ban was placed by the US court and these new developments will make Xiaomi feel more comfortable. In recent times, we haven’t seen Chinese firms recording victories in the US but with the new presidential change, this can be interpreted as a positive change. It will be seen if apart from Xiaomi, other companies like Huawei Technologies, WeChat super, TikTok and other Chinese entities will also get few relaxations.