Blacklisted Chinese companies are considering suing the US after Xiaomi’s victory over Trump’s ban

WASHINGTON (Reuters) – Targeted Chinese companies are contemplating a mass investment ban imposed by former President Donald Trump in the US government’s prosecution after a federal judge on Friday suspended a similar blacklist of Beijing-based smartphone maker Xiaomi.

Lawyers familiar with the matter said some of the banned Chinese firms are in talks with law firms including Steptoe & Johnson and Hogan Lovells, which were encouraged by the initial order of US District Judge Rudolf Contreras to stop listing Xiaomi on a US list of alleged Communist Chinese military companies. Subject to investment ban.

The Trump administration’s move to blacklist Xiaomi Corp, which shed $ 10 billion of market share and cut its shares by 9.5% in January, would have forced investors to withdraw their stakes entirely in the company.

“Firms are reaching out to attorneys to challenge the listings and the basis for the listings,” said Wendy Wesung, managing partner of the Hong Kong office of Steptoe & Johnson, a global law firm based in Washington.

Wysong and a person familiar with Hogan Lovells, another global law firm, declined to name the companies participating in the discussions.

Contreras referred to the US government’s “severely flawed” process to include the company in the investment ban, based on only two main criteria: its development of 5G technology and artificial intelligence, which the Department of Defense claims is “essential to modern military operations,” and an award given to Xiaomi’s founder and CEO Lei Jun from An organization said to be helping the Chinese government to remove barriers between the commercial and military sectors.

El Kady noted that 5G and AI technologies are rapidly becoming a record in consumer electronics, and that more than 500 entrepreneurs have won the same Lei award since 2004, including leaders of the infant formula company.

Said Washington attorney Brian Egan, a former legal counsel in both the White House and State Department who also works in Steptou.

The government is hesitant on the way forward

In a file shared today, the government said it had not decided a “proper path forward” in the Xiaomi case in light of the judge’s decision.

A spokesman for the US Justice Department, which is advocating the case, declined to comment.

A Defense Department spokesman referred questions to the White House, which did not respond.

Xiaomi and 43 other companies in the final months of the Trump administration were added to the blacklist, which was mandated under a 1999 law requiring the Department of Defense to publish a group of companies “owned or controlled” by the Chinese military.

Seeking to consolidate a hard-line stance on China and turn his Democratic successor, Joe Biden, into hard-line policies, Trump signed an executive order that was later expanded to prevent all American investors from holding securities in the aforementioned companies as of November 11, 2021.

Other listed companies include video surveillance giant Hikvision, China National Offshore Oil Corporation (CNOOC), and International Semiconductor Manufacturing Corporation (SMIC), the largest chip maker in China.

SMIC, Hikvision, and CNOOC did not immediately respond to requests for comment.

Luokung Technology Corp., a listed mapping technology company, also filed a lawsuit against the US government earlier this month and is expected to seek initial aid similar to that given to Xiaomi.

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