The US government and Xiaomi have reached an agreement to remove the Chinese smartphone maker from a trade blacklist dating back to the Trump administration. After a court ruling sided with Xiaomi in March, the US Defense Department (DoD) agreed on Wednesday that removing the company from the blacklist “would be appropriate.”
The Chinese tech giant had sued the US government after the DoD under former President Donald Trump issued an order designating the firm as a Communist Chinese Military Company, which would have led to a de-listing from US exchanges and deletion from global benchmark indexes, Bloomberg reported.
Shares of the Hong Kong-listed company rallied as much as 6.7% after the news broke. Xiaomi has not yet released an official statement concerning the de-listing, though.
In response to the initial blacklisting, Xiaomi insisted that the decision was arbitrary and that the company was managed and operated independently from the Chinese military with dispersed equity and publicly traded shares.
Amid rising tensions between the two countries, Chinese telcos have been on the DoD’s radar as a potential national security threat. In 2019, following a vote by the Federal Communications Commission (FCC), the US decided to deny several Chinese mobile providers the right to provide its services in the country.
Other Chinese telcos that have been deemed a threat to US national security are Huawei Technologies Co, ZTE Corp, Hytera Communications Corp, Hangzhou Hikvision Digital Technology Co, and Dahua Technology Co.
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According to GlobalData’s thematic analysis, Xiaomi is one of the key players in China’s 5G network rollout. Along with Huawei and ZTE, it is one of the main national champions for 5G equipment.