Smartphone Maker Xiaomi Has Sued the United States Government Over Its Inclusion in a Military Blacklist

What Does it Mean to Be Military Blacklisted

Smartphone maker, Xiaomi, has sued the United States government over its inclusion in a military blacklist. It’s causing lots of discussion on the constitutionality of the situation, given the blacklist is in China. In the past few years, the Trump administration has been engaging in a US-China trade war. Whether the lawsuit by Xiaomi has merit, only the federal courts will be able to judge. The implications for the stock markets and investors is enormous. It has negative impacts on two major global economies.

It leaves the question, what would cause a government to blacklist a company?

What Does it Mean to Be Military Blacklisted?

Usually, the term “blacklisted” in the government indicates a country or organization can not be trusted. This can restrict travel, trade, political ties, or trade with another country. After Xiaomi was blacklisted, American investors were unable to buy shares for their portfolios. Any securities of any companies that have the Chinese military designation fell under this blacklist. Usually, blacklisting is due to conflict of interest or a penalty for unethical practices.

Why is Xiaomi Blacklisted?

Xiaomi was blacklisted under the Trump administration due to the National Defense Authorization Act of 1999. Xiaomi was blacklisted since it’s been considered a “Communist Chinese military companies” and, therefore, cannot do business with the U.S

Xiaomi’s decision to sue is since the blacklisted decision is “unconstitutional” since they believe it “deprives Xiaomi of its liberty and property rights without due process of law” and therefore violates the Fifth Amendment of the U.S Constitution. But will it hold in the U.S court since it’s a matter of another country? Only time will tell.

What Can Be Expected for the Verdict?

The situation with Xiaomi blacklisted from the US might sound similar to another case. Not too long ago, another major tech company, Huawei, proceeded with similar action after the Trump administration banned their equipment from being sold in the U.S due to a US/China war over trade. However, that case was overturned by a federal judge.

The likelihood that this case will also be overturned is highly likely. Mainly because it falls under the National Defense Authorization Act; however, since most US-China war issues fell under the previous administration, now the Biden administration has taken charge, and possible tensions with other countries, including China, can hopefully be elevated.

Article by Megan Thompson

Megan Thompson is a legal writer at Lawrina. Megan writes about different law practice areas, legal innovations, and shares her knowledge about her legal practice. As a graduate of the American University's Washington College of Law she is an expert of law in Lawrina's team and has a slight editing touch to all content that is published on the website.

Thank You! Welcome on board
We use cookies to improve our website's work and deliver better services.
Our use of cookies
Upgrade the manual re-reading of agreements with Loio's AI-driven Highlights. Be in full control over every editing decision, but have the power of machine learning analysis by your hand. Turn on the Highlights tool whenever you need an extra check of your document's most essential details.
Analytics
These cookies collect information that is used to help Us understand how Our Site are being used or how effective Our marketing campaigns are, or to help Us customize Our Site for You. We use Google Analytics to recognize You and link the devices You use when You visit Our Site or Service on Your browser or mobile device, login to Your User Account on Our Site, or otherwise engage with Us.
Communication services
These cookies collect information that is used to help Us to facilitate the interaction with You on Our Site. We also use those cookies to improve customer service by maintaining contact with visitors of Our Site through Intercom chat.
Ad Services
We and Our third-party partners may also use cookies and tracking technologies for advertising purposes. These third-party services collect information about Your use of Our Site over time so that they may play or display ads on devices You may use, and on other websites, apps, or services.