Credit: Dhruv Bhutani / Android Authority
- Today, the Trump administration added Xiaomi to a blacklist reserved for companies with alleged ties to the Chinese military.
- With today’s move, US-based investors will need to remove any and all investments with the Chinese company.
- This is not the same “Entity List” that’s drastically affected Huawei’s business, but it’s still not good news.
To be clear, this is not the same list to which Trump added Huawei’s name in 2019. That list is related to firms that have supposed ties to the Chinese government directly and forbids US-based firms from working with them. This list is related specifically to the Chinese military. Apparently, the Trump administration thinks Xiaomi’s ties to the military are close enough that it poses a potential threat to the US.
This blacklist has been in existence since 1999. However, it lacked any real teeth until Trump granted an executive order which forbids US investors from investing in blacklisted firms. With Xiaomi’s name added to the blacklist, things just got tough.
Xiaomi blacklist: What does this mean?
If you are concerned that this news will decimate Xiaomi’s business as we’ve seen with Huawei, that is likely not the case. Xiaomi’s presence on this blacklist simply prevents investors based in the US from investing in Xiaomi. It won’t affect Xiaomi’s supply chain and won’t prevent US-based firms from selling equipment and materials to Xiaomi.
It will, however, cause Xiaomi’s stock to drop. It will also cause the company to lose a lot of liquid capital, as American investors will need to sell their stock in Xiaomi by November 11, 2021.
Time will tell whether or not these changes will be crippling for Xiaomi, a hindrance, or merely an annoyance. Either way, it definitely won’t be good or helpful.
Donald Trump will only be President of the United States for a few more days. However, it’s possible he could use his last days in office to make as many sweeping changes as possible such as today’s example.