Xiaomi set to be removed from US trade blacklist

Xiaomi looks set to be removed from the controversial US trade blacklist after the US Department of Defense deemed the move “appropriate.”

Bloomberg reports that the Chinese smartphone firm has won a US court appeal over the initial ban, with the US Defense Department agreeing upon a final order that will overturn the decision to block all trade with Xiaomi and its affiliates.

In January, the then-Trump administration accused Xiaomi of supposed links with the Chinese military, leading to this initial US trade ban and blacklist addition. This followed the high-profile trade bans imposed upon fellow Chinese firm Huawei, which has since crippled the brand over the past 18 months.

“The Parties have agreed upon a path forward that would resolve this litigation without the need for contested briefing,” according to filings seen by Bloomberg. They also suggest that the agreement did not yet include any conditions for removal. The US Department of Defense and Xiaomi are reportedly negotiating over specific terms and set to file a separate joint proposal before May 20.

Conversely, Xiaomi’s move to a US trade blacklist was less restrictive. The OEM has seen massive growth at the expense of Huawei in recent years as the trade restrictions did not directly affect supply chains. A diverse portfolio of products beyond smartphones and tablets has also likely helped Xiaomi’s growth over the past 24 months.

Although Xiaomi has a diverse product portfolio, the firm has little to no foothold in the telecommunications infrastructure space. This has likely been a core reason that US trade blacklists and bans have been less disruptive to Xiaomi’s core business areas.

US chipmaker Qualcomm recently invested in Xiaomi, which could have long-term ramifications for both firms. The addition of Xiaomi to a US trade blacklist would have forced the chipmaker to divest any acquired holdings by November 21, 2021. Removal of any trade sanctions will likely be welcomed by both parties as Xiaomi’s recent growth puts more Qualcomm-powered devices in the hands of consumers across the globe.

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