(Reuters) – Chinese companies targeted by a comprehensive investment ban imposed by former President Donald Trump are considering suing the US government after a federal judge on Friday suspended a similar blacklist for Beijing-based smartphone maker Xiaomi .
Lawyers familiar with the matter said some of the banned Chinese companies are in talks with law firms, including Steptoe & Johnson and Hogan Lovells, encouraged by U.S. District Judge Rudolph Contreras’s preliminary injunction to list Xiaomi’s listing on a U.S. listing of suspected communist Chinese military companies. is subject to an investment ban.
The move by the Trump administration to blacklist Xiaomi Corp., which cut $ 10 billion from its market share and dropped its shares by 9.5 percent in January, would have forced investors to sell their stake in the company completely.
“Companies are reaching out to lawyers to challenge the listings and the grounds for the listings,” said Wendy Wysong, managing partner of the firm in Steptoe & Johnson, a global law firm in Washington, Hong Kong. Wysong and a person familiar with Hogan Lovells, another global law firm, declined to name the companies involved in discussions.
Contreras cited the US government’s “deeply flawed” process for including the company in the investment ban, based on just two key criteria: the development of 5G technology and artificial intelligence, which the Defense Department says are essential to modern military operations. ‘, and an award given to Xiaomi’s founder and CEO Lei Jun, said it should help the Chinese government eliminate barriers between commercial and military sectors.
The judge noted that 5G and AI technologies have quickly become standard in consumer electronics, and that more than 500 entrepreneurs have received the same award as Lei since 2004, including the leaders of a baby formula business.
“The facts that led to the appointment of Xiaomi are almost ridiculous, and I think it’s definitely going to lead to additional companies seeking relief,” said attorney Brian Egan of Washington, a former legal adviser to both the White House and the department. of foreign affairs, worked. Steptoe.
GOVERNMENT DECIDES ON ROAD FORWARD
In a joint submission Tuesday, the government said it had not decided on the “appropriate way forward” in the Xiaomi case in light of the judge’s ruling.
A spokesman for the U.S. Department of Justice, who is defending the case, declined to comment. A Department of Defense spokesman referred questions to the White House, which did not respond.
Xiaomi and 43 other companies were added to the blacklist here in the waning months of the Trump administration, which required a 1999 law that required the Department of Defense to publish a list of companies owned or controlled by the Chinese military word.
In search of a difficult line over China and to keep its Democratic successor, Joe Biden, in a tough policy, Trump signed an executive order that was later expanded to ban all U.S. investors from trading securities in the said companies. holds from 11 November 2021.
Other listed companies include video surveillance giant Hikvision, China National Offshore Oil Corp (CNOOC) and China’s leading disc maker, Semiconductor Manufacturing International Corp.
SMIC, Hikvision and CNOOC did not immediately respond to requests for comment.
Luokung Technology Corp., a mapping technology company on the list, also sued the U.S. government earlier this month and is expected to seek preliminary legal aid, similar to that awarded to Xiaomi.
Reporting by Karen Freifeld and Alexandra Alper; Additional reporting by Mike Stone; Edited by Peter Cooney