With six days left in office, the Trump administration has decided to put one more Chinese electronics giant in its sights: Xiaomi, the world’s number three phone manufacturer. The US Department of Defense is now designating Xiaomi as a “Chinese Communist military company,” meaning it’s now vulnerable to Trump’s executive order that bans the US from investing in such companies — and might force US companies and other US investors to divest in Xiaomi on November 11th, 2021, as reported by Reuters.
In a statement sent to The Verge, Xiaomi maintains that it’s “operating in compliance with the relevant laws and regulations of jurisdictions where it conducts its businesses.” The spokesperson contends that Xiaomi “is not 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 says it’s now reviewing the potential consequences of the DoD designation before taking action.
While a Biden administration might overturn the order before then, it’s interesting to see an electronics company like Xiaomi on the list at all. Most of the other companies on the list are more industrially oriented, specializing in aviation, aerospace, shipbuilding, chemicals, telecommunications, construction, and other forms of infrastructure. Huawei, the world’s number two phonemaker, is also on the list, but Huawei builds large-scale telecommunications equipment too; US lawmakers have been specifically worried about Huawei being part of the nation’s cellular infrastructure (also see: ZTE).
This list isn’t the same as the US Commerce Department’s “entity list,” by the way, which typically keeps US companies from exporting technology to companies that have been blacklisted, like dronemaker DJI. But some Chinese companies like Huawei (and Chinese chipmaker SMIC) are on both lists now.
Speaking of the Commerce Department, it’s moving ahead to try to block six entire countries, now designated as “foreign adversaries,” from providing communications equipment to the United States at all, including China, Russia, Iran, North Korea, Cuba, and the government of Venezuela’s Nicolás Maduro.
Update January 15th, 2:40AM ET: Added statements from Xiaomi.