Xiaomi files legal complaint against US Defense and Treasury Departments

Xiaomi filed a complaint in a Washington district court on Friday against the U.S. Defense and Treasury Departments, seeking to remove the Chinese smartphone maker from an official blacklist.

Xiaomi was added to the list of companies with ties to China’s military in January. This means that the US Defense Department required American investors to divest their holdings in the firms on the list by a set deadline.

The complaint was filed after Joe Biden took office and was sent to Defense Secretary Lloyd Austin and Treasury Secretary Janet Yellen.

According to a report by Reuters, Xiaomi called the judgment “unlawful and unconstitutional” and said the company was not controlled by the People’s Liberation army. It also argued that the effects of the restrictions that come into force next month would cause irreparable damage to the company.

“The company’s strategic relationships with US financial institutions are critical for Xiaomi to continue to access the capital it needs to continue to grow in a highly competitive market - will be significantly damaged,” the complaint stated.

“Moreover, the public association of Xiaomi with the Chinese military will significantly impair the company’s standing with business partners and consumers, causing reputational harms that cannot be readily quantified or easily repaired.”