The outgoing US President Donal Trump is putting pressure on a Chinese company. However; this time, it’s Xiaomi. As Trump’s administration also approaches to end of their terms, they have designated Xiaomi, a Communist Chinese military firm, and added Xiaomi to the blacklist that could force US investors to divest. Xiaomi is known as the third best-selling smartphone company throughout the world.
According to Reuters, a 1999 law requires the Defense Department to make a list of firms controlled or held by the People’s Liberation Army. The Pentagon has listed 35 firms so far. The chipmaker SMIC is also add in the list.
The tech giant Huawei is also the part of this catalogue. The Xiaomi is added to the blacklist due to telecoms infrastructure business that is a concern for some governments.
The SMIC and Huawei are also included in the entity list of US Commerce Department. This department keeps US organizations from exporting to blacklist firms which lack government license. Therefore, Huawei’s latest phones do not have U.S hardware and Google Apps.
The firms added recently in the blacklist will be affected by an investment ban that makes American financiers divest their shares on November 11, 2021. It is expecting that the Biden government doesn’t capsize the order.
Last year, Xiaomi was alleged that it recorded users’ incognito web browsing. Now it takes the third-largest share in the world market of smartphones. The South Korean tech giant Samsung at the top while Huawei secured second place, as per IDC.
In a talk to The Verge, Xiaomi said that “it works in compliance with relevant laws and state’ regulations where the company performs its operations. Under NDAA [National Defense Authorization Act], the company’s representative asserts that Xiaomi “is not owned or controlled by the Chinese military, and is not a Communist Chinese Military Firm”.
Besides these, Xiaomi is assessing the consequences of the labelling before adopting measures.