Trump adds Xiaomi to blackist for Chinese military firms
Recognition: Dhruv Bhutani / Android Authority
- Today the Trump administration blacklisted Xiaomi reserved for companies with alleged links to the Chinese military.
- With today’s move, US investors must remove all investment in the Chinese company.
- This is not the same “entity list” that has drastically impacted Huawei’s business, but it’s still not good news.
According to ReutersThe Trump administration in the US today blacklisted nine Chinese companies. Of these nine companies, the Chinese smartphone maker is Xiaomi.
This is not the same list Trump added Huawei’s name to in 2019. This list pertains to companies allegedly directly affiliated with the Chinese government and prohibits U.S. companies from doing business with them. This list is specific to the Chinese military. Apparently, the Trump administration believes Xiaomi’s ties to the military are close enough to pose a potential threat to the U.S.
Connected: The Huawei Ban: All You Need To Know
That blacklist has existed since 1999. However, real teeth were missing until Trump issued an executive order prohibiting US investors from investing in blacklisted companies. With Xiaomi’s name on the blacklist, things just got difficult.
Xiaomi blacklist: what does it mean?
If you are concerned that this news will decimate Xiaomi’s business, as we’ve seen with Huawei, then it probably isn’t. Xiaomi’s presence on this blacklist merely prevents US-based investors from investing in Xiaomi. This has no impact on Xiaomi’s supply chain and does not prevent US companies from selling devices and materials to Xiaomi.
Connected: Xiaomi in 2021: five things we want to see
However, it will cause Xiaomi’s shares to fall. This will also result in the company losing a lot of liquid capital as American investors have to sell their shares in Xiaomi by November 11, 2021.
Time will tell whether these changes will be crippling, cumbersome or just annoying for Xiaomi. In any case, it will definitely not be good or helpful.
Donald Trump will only be President of the United States for a few more days. However, it is possible that he could use his final days in office to make as many sweeping changes as possible, as in today’s example.
