Xiaomi Blacklisted By US Government: How Will It Impact Smartphone Market?

Xiaomi is the latest Chinese company targeted by the US government. In the latest development, the US government led by the Trump administration has called out Xiaomi as a 'Communist Chinese military company'. Further, Xiaomi is now blacklisted under the US government, which doesn't allow US citizens to invest in Xiaomi.

Xiaomi Blacklisted By US Government

In other words, Xiaomi joins the list of blacklisted Chinese companies like Huawei. This bars US-based securities and investment companies from investing in the list of blacklisted companies. Going further into the details, the US administration stated that US investors will no longer finance the Chinese military.

The executive order states, "PRC exploits United States investors to finance the development and modernization of its military." The statement further notes US investors trading on the public stock exchange in both the US and overseas are investing in such companies, which will hereby be blocked.

Xiaomi Responds

It's surprising to see the US administration adding Xiaomi to the blacklist, especially because it's the third-largest smartphone maker in the world. The sudden turn of events could impact the smartphone market that's presently dominated by several Chinese players, especially in India. However, the US market is crowded with devices from Samsung and Apple, followed by Chinese companies like Xiaomi, OnePlus, and others.

In a statement to The Verge, Xiaomi responded that it's "operating in compliance with the relevant laws and regulations of jurisdictions where it conducts its businesses." A Xiaomi spokesperson further noted that the company isn't owned, controlled, or affiliated with the Chinese military, and is not a 'Communist Chinese Military Company' defined under the NDAA [National Defense Authorization Act].

Xiaomi Blacklisted: How Long Would It Last?

That said, there are several changing factors in the US government. For one, the Biden administration would be taking over the government rein in a week. The order could be overturned to ease the tension between the US and China. Since nothing is certain yet, it remains to see what would happen with Xiaomi in the US.