Shortly before the end of his term in the White House, the Trump administration is targeting another large Chinese company, accusing the giant Xiaomi of links to the Chinese military.
Apparently, the Trump administration considers Xiaomi a potential threat to the United States.
In response to the allegations, the smartphone manufacturer vehemently denies the alleged military links:
“The company complied with the law and operated in accordance with the relevant laws and regulations of the jurisdictions in which it operates. The company reiterates that it provides products and services for civil and commercial use. The company confirms that it is not owned, controlled or affiliated with the Chinese military and that it is not a “Communist Chinese Military Company” defined in the NDAA. The company will take appropriate action to protect the interests of the company and its shareholders.
The company is analyzing the potential consequences of this to develop a better understanding of its impact on the group. The company will make other announcements as appropriate.
” According to Reuters, the Trump administration has selected nine Chinese companies for inclusion on a so-called blacklist. These include smartphone maker Xiaomi.
Fortunately for the Chinese manufacturer, this is not the same list on which Huawei is found, being exclusively concerned with possible links with the Chinese army. Unlike Huawei, Xiaomi is not accused of direct links with the Chinese government, so any sanctions will be less harmful to the company’s business.
What are the consequences of including Xiaomi on the US “blacklist”? The company’s blacklisting simply prevents US investors from investing in Xiaomi. It will not affect the company’s supply chain and will not prevent US companies from selling equipment and materials to Xiaomi.
However, as US investors are forced to sell their Xiaomi shares by November 11, 2021, there will certainly be a sharp decline in the value of Xiaomi shares. The main consequence will be the decrease of liquidity, raising certain difficulties in continuing the business activity.