A US court has overturned the sanctions against the Chinese company Xiaomi – at least for the time being.
What about the sanctions against Xiaomi?
Donald Trump waged an ongoing trade war against China during his time as US President. In this context, there were numerous sanctions against Chinese companies, including smartphone manufacturer Xiaomi. In contrast to colleague Huawei , Xiaomi caught it comparatively late, namely on January 14, 2021. The US Department of Defense accused the Chinese company of espionage on behalf of the government and a close relationship with the military. Xiaomi ended up on a blacklist, which severely restricted contact with US companies.
Since then, users of Xiaomi smartphones have had to ask themselves how long they can still use Google apps, for example. These fears are generally off the table, as the US has not imposed a general trade ban on Xiaomi – in contrast to Huawei. One immediate consequence, however, was a significant drop in company shares. These have lost almost a third of their value in the past few weeks. Immediately after the sanctions against the company became known, Xiaomi announced that it would raise an objection. Apparently they were now successful.
US court overturns sanctions against Xiaomi
The sanctions meant in detail that US investors are no longer allowed to participate in the companies that are on the blacklist. If they own the shares, they should have sold them by November 2021. Actually, the sanctions should have come into force next week, Xiaomi has appealed against this. And the US district judge Rudolph Contreras now agreed with the company. He found that the Ministry of Defense’s reasoning that national security was at risk was not convincing.
This means that the sanctions are at least temporarily suspended. Xiaomi now wants to ensure that the measures are permanently lifted by another court order.
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What does this mean for users of Xiaomi technology?
If you use technical devices from Xiaomi, especially smartphones, you don’t have to worry at first. The use of the Android operating system was hardly in danger, as were the popular Google apps. And in contrast to Huawei, there has been no ban on the delivery of American components for the manufacturer’s devices such as chips. However, the ruling has a direct impact on Xiaomi’s share price, which has recovered significantly. Xiaomi could even benefit from the ongoing sanctions against Huawei in this context.
Even if the US government under its new President Joe Biden does not want to change its strategy towards China for the time being, there has also been a lifting of the ban on the TikTok and WeChat apps demanded by Trump.